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Item 8. Financial Statements and Supplementary Data

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 Company uses various valuation techniques to determine the fair value of its intangible assets, primarily discounted cash flows analysis, relief-from-royalty and multi-period excess earnings. As the assumptions employed to measure these assets are based on 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). 
 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. The impairment evaluation for goodwill utilizes a qualitative assessment to determine whether it is more likely than not that goodwill is impaired. The qualitative factors may include, but are not limited to, macroeconomic conditions, industry and market conditions, operating environment, financial performance and other relevant events. 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. If the fair value of the reporting unit exceeds the carrying value, goodwill is not impaired. 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. 
 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. 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. If the fair value of the indefinite-lived intangible asset exceeds the carrying value, the asset is not impaired. 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. 
 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. 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. If the carrying amount of the asset exceeds its fair value, an impairment is recorded. 
 Impairment charges, if any, are recorded in general and administrative expenses on the consolidated statements of operations. 
 Litigation - The Company is a party to certain legal and regulatory proceedings with respect to a variety of matters. 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. Loss contingencies are recorded in provision for litigation on the consolidated statements of operations. 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. Legal costs are expensed as incurred and recorded in general and administrative expenses on the consolidated statements of operations. 
 Settlement and other risk management - Mastercard’s rules guarantee the settlement of many of the payment network transactions between its customers. 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. 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. The duration of the settlement exposure is short-term and generally limited to a few days. 
 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. 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. 
 The Company accounts for each of its guarantees by recording the guarantee at its fair value at the inception or modification date through earnings. 
 Settlement assets/obligations - The Company operates systems for settling payment transactions among participants in the payments ecosystem in which the Company operates. Settlement is generally completed on a same-day basis. In some circumstances, however, funds may not settle until subsequent business days. In addition, the Company may receive or post funds in advance of transactions related to certain payments capabilities. The Company classifies the balances arising from these various activities as settlement assets and settlement obligations. 
 Income taxes - The Company follows an asset and liability based approach in accounting for income taxes as required under GAAP. 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. Deferred income taxes are displayed separately as noncurrent assets and liabilities on the consolidated balance sheets. Valuation allowances are provided against assets which are not more likely than not to be realized. 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. At each balance sheet date, unresolved uncertain tax positions are reassessed to 
 
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 determine whether subsequent developments require a change in the amount of recognized tax benefit. The allowance for uncertain tax positions is recorded in other current and noncurrent liabilities on the consolidated balance sheets. The Company records interest expense related to income tax matters as interest expense on the consolidated statements of operations. The Company includes penalties related to income tax matters in the income tax provision. 
 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. Cash equivalents are recorded at cost, which approximates fair value. 
 Restricted cash and restricted cash equivalents - The Company classifies cash and cash equivalents as restricted when it is unavailable for withdrawal or use in its general operations. The Company has the following types of restricted cash and restricted cash equivalents (“restricted cash”) that are included in the reconciliation of beginning-of-period and end-of-period amounts shown on the consolidated statements of cash flows: 
 • Restricted cash - Restricted cash includes cash segregated to meet regulatory commitments, cash within qualified legal settlement funds and cash restricted for other general business purposes, including contractually restricted deposits as well as cash balances that are restricted based on the Company’s intention with regard to usage. 
 • Restricted security deposits held for customers - The Company requires certain customers to enter into risk mitigation arrangements, including cash collateral and/or forms of credit enhancement such as letters of credit and guarantees, for settlement of their transactions. Certain risk mitigation arrangements for settlement, such as standby letters of credit and bank guarantees, are not recorded on the consolidated balance sheets. 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 sheets. These assets are fully offset by corresponding liabilities included on the consolidated balance sheets. 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. 
 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. 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. The Company classifies these recurring and nonrecurring fair value measurements into a three-level hierarchy (“Valuation Hierarchy”). 
 The Valuation Hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. 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. The three levels of the Valuation Hierarchy are as follows: 
 • Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. 
 • 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. 
 • Level 3 - inputs to the valuation methodology are unobservable and cannot be directly corroborated by observable market data. 
 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. The Company’s financial assets measured at fair value on a nonrecurring basis include nonmarketable securities. 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. 
 Investment securities - The Company classifies investments as available-for-sale or held-to-maturity at the date of acquisition. 
 • Available-for-sale debt securities: 
 ◦ 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 sheets. 
 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 statements of changes in equity. Net realized gains and losses on debt securities are recognized in investment income on the consolidated statements of operations. The specific identification method is used to determine realized gains and losses. 
 The Company evaluates its debt securities for impairment on an ongoing basis. When there has been a decline in fair value of a debt security below the amortized cost basis, the Company recognizes an impairment if: (1) it has the intent to sell the security; (2) it is more likely than not that it will be required to sell the security before recovery of the amortized cost basis; 
 
 
 
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 or (3) it does not expect to recover the entire amortized cost basis of the security. The credit loss component of the impairment is recognized as an allowance and recorded in other income (expense), net on the consolidated statements of operations while the non-credit related loss remains in accumulated other comprehensive income (loss) until realized from a sale or subsequent impairment. 
 • Held-to-maturity securities: 
 ◦ Time deposits - The Company classifies time deposits with original maturities greater than three months as held-to-maturity. Held-to-maturity securities that mature within one year are classified as current assets within investments on the consolidated balance sheets while held-to-maturity securities with maturities of greater than one year are classified as other assets. Time deposits are carried at amortized cost on the consolidated balance sheets and are intended to be held until maturity. 
 Equity investments - The Company holds equity securities of publicly traded and privately held companies. 
 • 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 statements of operations. 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 sheets. 
 • Nonmarketable equity investments - The Company’s nonmarketable equity investments, which are reported in other assets on the consolidated balance sheets, include strategic investments in privately held companies without readily determinable market values. 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. The Company’s nonmarketable equity investments are accounted for under the measurement alternative method or equity method. 
 ◦ 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. 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. 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. Fair value adjustments, as well as impairments, are included in gains (losses) on equity investments, net on the consolidated statements of operations. 
 ◦ 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. 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. 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 statements of operations. 
 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 outstanding ownership interest. The Company’s share of net earnings or losses for these investments are included in gains (losses) on equity investments, net on the consolidated statements of operations. 
 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. 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. The Company does not enter into derivative instruments for trading or speculative purposes. 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. 
 The Company’s derivatives that are designated as hedging instruments are required to meet established accounting criteria. 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. 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. 
 
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 The Company may designate derivative instruments as cash flow, fair value and net investment hedges, as follows: 
 • Cash flow hedges - Fair value adjustments to derivative instruments are recorded, net of tax, in other comprehensive income (loss) on the consolidated statements of comprehensive income. Any gains and losses deferred in accumulated other comprehensive income (loss) are subsequently reclassified to the corresponding line item on the consolidated statements of operations when the underlying hedged transactions impact earnings. 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. Any amounts excluded from effectiveness testing of cash flow hedges are recognized in earnings over the life of the hedging instrument. 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 statements of operations in current earnings. 
 • 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. All amounts recognized in earnings are recorded to the corresponding line item on the consolidated statements of operations as the earnings effect of the hedged item. Hedged items are measured on the consolidated balance sheets at their carrying amount adjusted for any changes in fair value attributable to the hedged risk (“basis adjustments”). The Company defers the amortization of any basis adjustments until the end of the derivative instrument’s term. 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. 
 • Net investment hedges - The Company has numerous investments in foreign subsidiaries. The net assets of these subsidiaries are exposed to volatility in foreign currency exchange rates. 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. 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 sheets as a cumulative translation adjustment component of equity. 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. Amounts excluded from effectiveness testing of net investment hedges are recognized in earnings over the life of the hedging instrument. The Company evaluates the effectiveness of the net investment hedge each quarter. 
 Property, equipment and right-of-use assets - Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets. Depreciation of leasehold improvements and amortization of finance leases is included in depreciation and amortization expense on the consolidated statements of operations. Operating lease amortization expense is included in general and administrative expenses on the consolidated statements of operations. 
 The Company determines if a contract is, or contains, a lease at contract inception. The Company’s right-of-use (“ROU”) assets are primarily related to operating leases for office space, automobiles and other equipment. Leases are included in property, equipment and right-of-use assets, other current liabilities and other liabilities on the consolidated balance sheets. 
 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. ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. 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. 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 commencement date in determining the present value of lease payments. 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. Lease terms include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Leases with a term of one year or less are excluded from ROU assets and liabilities. 
 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. Lease and nonlease components are generally accounted for separately. 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. 
 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 sheets and recognizes changes in the funded status in the year in which the changes occur through accumulated other comprehensive income (loss). 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. 
 
 
 
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 Overfunded plans, if any, are aggregated and recorded in other assets, while underfunded plans, if any, are aggregated and recorded as accrued expenses and other liabilities on the consolidated balance sheets. 
 Net periodic pension and postretirement benefit cost/(income), excluding the service cost component, is recognized in other income (expense), net on the consolidated statements of operations. 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). The service cost component is recognized in general and administrative expenses on the consolidated statements of operations. 
 Defined contribution plans - The Company’s contributions to defined contribution plans are recorded as employees render service to the Company. The charge is recorded in general and administrative expenses on the consolidated statements of operations. 
 Advertising and marketing - Expenses incurred to promote Mastercard’s brand, products and services are recognized in advertising and marketing on the consolidated statements of operations. The timing of recognition is dependent on the type of advertising or marketing expense. 
 Foreign currency remeasurement and translation - Revenue and expense transactions in currencies other than applicable functional currency of an entity are converted to the functional currency at the exchange rate on the transaction date. 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. Non-monetary assets and liabilities are recorded at historical exchange rates. Resulting exchange gains and losses related to remeasurement are included in general and administrative expenses on the consolidated statements of operations. 
 Where a non-U.S. currency is the functional currency, translation from that functional currency to U.S. 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. Resulting translation adjustments are reported as a component of accumulated other comprehensive income (loss). 
 Government grants - The Company receives government grants from various jurisdictions spanning multiple years, primarily to support investment initiatives in those jurisdictions. Government grants, primarily cash grants, are recognized when there is reasonable assurance that the grant will be received and compliance with the conditions specified in the agreement will be met. Within the consolidated statements of operations, the Company records operating-related grants as a reduction to expense in the same line item as the expenditure for which the grant is intended to compensate. Government grants that are not intended to compensate operating expenses are recorded in other income (expense), net on the consolidated statements of operations. 
 Treasury stock - The Company records the repurchase of shares of its common stock at cost on the trade date of the transaction. These shares are considered treasury stock, which is a reduction to stockholders’ equity. Treasury stock is included in authorized and issued shares but excluded from outstanding shares. The Company also records an excise tax of 1% on the fair market value of net repurchases of shares of its common stock within treasury stock. 
 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. The Company estimates the fair value of its non-qualified stock option awards (“Options”) using a Black-Scholes valuation model. 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. The Monte Carlo simulation valuation model is used to determine the grant date fair value of performance stock units (“PSUs”) granted. All share-based compensation expenses are recorded in general and administrative expenses on the consolidated statements of operations. 
 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. 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. 
 Accounting Pronouncements Not Yet Adopted 
 Disaggregation of Income Statement Expenses - In November 2024, the Financial Accounting Standards Board (“FASB”) issued accounting guidance to improve the disclosures of a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods after December 15, 2027. The Company is in the process of evaluating when it will adopt this guidance. 
 
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 Targeted Improvements to the Accounting for Internal-Use Software - In September 2025, the FASB issued accounting guidance to modernize the accounting for internal-use software costs by eliminating the consideration of project development stages and clarifying the criteria for capitalization. This guidance is effective for fiscal years beginning after December 15, 2027, including interim periods. The Company is in the process of evaluating when it will adopt and assessing the impact of this guidance on its financial statements. 
 Accounting for Government Grants Received by Business Entities - In December 2025, the FASB issued accounting guidance on the recognition, measurement and presentation for government grants received by business entities. This guidance is effective for fiscal years beginning after December 15, 2028, including interim periods. The Company is in the process of evaluating when it will adopt and assessing the impact of this guidance on its financial statements. 
 
 Note 2. Acquisitions 
 In 2025, the Company did not complete any business acquisitions. 
 In 2024, the Company acquired businesses for total cash consideration of $ 2.8 billion. In December 2024, Mastercard acquired a 100 % equity interest in RF Ultimate Parent, Inc. (“Recorded Future”), a global threat intelligence company, for cash consideration of $ 2.7 billion. This acquisition is expected to add threat intelligence capabilities to Mastercard’s identity, fraud prevention, real-time decisioning and cybersecurity services. The net assets acquired primarily related to intangible assets, including goodwill of $ 1.7 billion that is primarily attributable to the synergies expected to arise after the acquisition date. None of the goodwill is expected to be deductible for local tax purposes. 
 In 2023, the Company did not complete any material business acquisitions. 
 These acquisitions align with the Company’s strategy to grow, diversify and build the Company’s business. Refer to Note 1 (Summary of Significant Accounting Policies) for the valuation techniques Mastercard utilizes to fair value the respective components of business combinations. 
 In 2025, the Company finalized the purchase accounting for the businesses acquired in 2024. The fair values of the purchase price allocations in aggregate, as of the acquisition dates, are noted below for the businesses acquired in 2024. 
 
 2024 
 (in millions) 
 
 
 
 
 
 
 Assets: 
 Cash and cash equivalents $ 270 
 Prepaid expenses and other current assets 
 79 
 Goodwill 1,736 
 Other intangible assets, net 
 1,361 
 
 Other assets 20 
 Total assets 3,466 
 
 Liabilities: 
 
 Other current liabilities 413 
 Deferred income taxes 207 
 Other liabilities 65 
 Total liabilities 685 
 
 Net assets acquired $ 2,781 

 
 
 
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 The following table summarizes the identified intangible assets acquired in 2024: 
 
 2024 2024 
 Acquisition Date Fair Value Weighted-Average Useful Life 
 (in millions) (in years) 
 Developed technologies $ 530 8.9 
 Customer relationships 781 15.0 
 Other 
 50 9.0 
 Other intangible assets, net 
 $ 1,361 12.4 

 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. 
 
 Note 3. Revenue 
 Mastercard is a payments network service provider that generates revenue from a wide range of payments solutions provided to customers. 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). The Company disaggregates its net revenue from contracts with customers into two categories: (i) payment network and (ii) value-added services and solutions. The Company’s net revenue categories, payment network and value-added services and solutions, are recognized net of rebates and incentives provided to customers. Rebates and incentives can be either fixed or variable and are attributed to the category of revenue to which they pertain. 
 Payment network 
 Mastercard’s payment network involves four participants in addition to the Company: 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). 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. 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. Consideration is variable and is recognized as revenue in the period in which volumes and transactions occur. 
 Value-added services and solutions 
 The Company generates revenues from value-added services and solutions through either fixed or transaction-based fees. 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. These services and solutions primarily include security solutions, consumer acquisition and engagement services, business and market insights, digital and authentication solutions, processing and gateway, ACH batch and real-time account-based payments and solutions, and open finance. Revenue from these services and solutions is recognized in the period in which the related services and solutions are performed or transactions occur. 
 
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 The Company’s disaggregated net revenue by category and geographic region were as follows for the years ended December 31: 
 
 
 2025 2024 2023 
 (in millions) 
 
 Net revenue by category: 
 
 Payment network $ 19,476 $ 17,335 $ 15,824 
 Value-added services and solutions 13,315 10,832 9,274 
 
 
 
 
 Net revenue $ 32,791 $ 28,167 $ 25,098 
 
 Net revenue by geographic region: 
 Americas 1 
 $ 14,044 $ 12,375 $ 11,135 
 Asia Pacific, Europe, Middle East and Africa 
 18,747 15,792 13,963 
 
 Net revenue $ 32,791 $ 28,167 $ 25,098 

 1 Americas includes the United States, Canada and Latin America. 
 The Company’s customers are generally billed weekly, with certain billings occurring on a monthly and quarterly basis. The frequency of billing is dependent upon the nature of the performance obligation and the underlying contractual terms. The Company does not typically offer extended payment terms to customers. The following table sets forth the location of the amounts recognized on the consolidated balance sheets from contracts with customers at December 31: 
 
 2025 2024 
 (in millions) 
 Receivables from contracts with customers 
 Accounts receivable 
 $ 4,010 $ 3,491 
 Contract assets 
 
 Prepaid expenses and other current assets 189 210 
 Other assets 508 460 
 Deferred revenue 1 
 
 Other current liabilities 1,137 890 
 Other liabilities 424 449 
 

 1 Revenue recognized from performance obligations satisfied in 2025 was $ 3.5 billion. 
 
 
 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). 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. Consideration is variable as the Company generates volume- and transaction-based revenues from charging fees on its customers’ current period activity. The Company has elected the optional exemption to not disclose the remaining performance obligations related to its payments network services. The Company also earns revenue from value-added services and solutions. At December 31, 2025, the estimated aggregate consideration allocated to unsatisfied performance obligations for these services and solutions is $ 2.0 billion, which is expected to be recognized through 2030. 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. 
 
 
 
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 Note 4. Earnings Per Share 
 The components of basic and diluted EPS for common shares for each of the years ended December 31 were as follows: 
 
 2025 2024 2023 
 (in millions, except per share data) 
 Numerator 
 Net income $ 14,968 $ 12,874 $ 11,195 
 Denominator 
 Basic weighted-average shares outstanding 905 925 944 
 Dilutive stock options and stock units 1 2 2 
 Diluted weighted-average shares outstanding 1 
 906 927 946 
 Earnings per Share 
 Basic $ 16.54 $ 13.91 $ 11.86 
 Diluted $ 16.52 $ 13.89 $ 11.83 

 Note: Table may not sum due to rounding. 
 1 For the years presented, the calculation of diluted EPS excluded a minimal amount of anti-dilutive share-based payment awards. 
 
 Note 5. Investments 
 The Company’s investments on the consolidated balance sheets include both available-for-sale and held-to-maturity debt securities (see Investments section below). The Company’s strategic investments in equity securities of publicly traded and privately held companies are classified within other assets on the consolidated balance sheets (see Equity Investments section below). 
 Investments 
 Investments on the consolidated balance sheets consisted of the following at December 31: 
 
 2025 2024 
 (in millions) 
 Available-for-sale securities 
 $ 319 $ 292 
 Held-to-maturity securities 1 
 13 38 
 Total investments $ 332 $ 330 

 1 Held-to-maturity securities represent investments in time deposits that mature within one year. The cost of these securities approximates fair value. 
 Investment income on the consolidated statements 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. The realized gains and losses from the sales of available-for-sale securities for 2025, 2024 and 2023 were not material. 
 Available-for-Sale Securities 
 The Company’s available-for-sale securities consist of corporate securities, government and agency securities and asset-backed securities. Government and agency securities include U.S. government bonds, U.S. government sponsored agency bonds and foreign government bonds that are denominated in the national currency of the issuing country. Corporate and asset-backed securities held at December 31, 2025 and 2024 primarily carried a credit rating of A- or better. Corporate securities are comprised of commercial paper and corporate bonds. The gross unrealized gains and losses on the available-for-sale securities for 2025, 2024 and 2023 were not material and are recorded in other comprehensive income (loss). 
 
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 The maturity distribution based on the contractual terms of the Company’s available-for-sale investment securities at December 31, 2025 was as follows: 
 
 Amortized
Cost Fair Value 
 (in millions) 
 Due within 1 year $ 103 $ 103 
 Due after 1 year through 5 years 215 216 
 Total $ 318 $ 319 

 Equity Investments 
 Included in other assets on the consolidated balance sheets are equity investments with readily determinable fair values (“Marketable securities”) and equity investments without readily determinable fair values (“Nonmarketable securities”). Marketable securities are equity interests in publicly traded companies and are measured using unadjusted quoted prices in their respective active markets. 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”). 
 The following table is a summary of the activity related to the Company’s equity investments: 
 
 Balance at December 31, 2024 Purchases Sales Changes in Fair Value 1 
 Other 2 
 Balance at December 31, 2025 
 (in millions) 
 Marketable securities $ 237 $ — $ ( 168 ) $ ( 86 ) $ 220 $ 203 
 Nonmarketable securities 1,370 339 ( 13 ) ( 2 ) ( 192 ) 1,502 
 Total equity investments $ 1,607 $ 339 $ ( 181 ) $ ( 88 ) $ 28 $ 1,705 

 1 Recorded in gains (losses) on equity investments, net on the consolidated statements of operations. 
 2 Includes reclasses between Marketable and Nonmarketable securities as well as translational impact of currency. 
 The following table sets forth the components of the Company’s Nonmarketable securities at December 31: 
 
 2025 2024 
 (in millions) 
 Measurement alternative 
 $ 1,242 $ 1,140 
 Equity method 
 260 230 
 Total Nonmarketable securities $ 1,502 $ 1,370 

 The following table summarizes the total carrying value of the Company’s Measurement alternative investments, including cumulative unrealized gains and losses through December 31: 
 
 2025 
 (in millions) 
 Initial cost basis 
 $ 932 
 Cumulative adjustments 1 : 
 
 Upward adjustments 522 
 Downward adjustments (including impairment) ( 212 ) 
 Carrying amount, end of period $ 1,242 

 1 Includes immaterial translational impact of currency. 
 
 
 
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 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: 
 
 2025 2024 2023 
 (in millions) 
 Measurement alternative investments: 
 Upward adjustments $ 31 $ 11 $ 7 
 Downward adjustments (including impairment) ( 32 ) ( 9 ) ( 145 ) 
 Marketable securities: 
 Unrealized gains (losses), net ( 84 ) ( 34 ) 97 

 
 Note 6. Fair Value Measurements 
 The Company’s financial instruments are carried at fair value, cost or amortized cost on the consolidated balance sheets. The Company classifies its fair value measurements of financial instruments into a three-level hierarchy (the “Valuation Hierarchy”). 
 Financial Instruments - Carried at Fair Value 
 Financial instruments carried at fair value are categorized for fair value measurement purposes as recurring or non-recurring in nature. 
 Recurring Measurements 
 The distribution of the Company’s financial instruments measured at fair value on a recurring basis within the Valuation Hierarchy was as follows: 
 
 December 31, 2025 December 31, 2024 
 Quoted Prices
in Active
Markets
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3) Total Quoted Prices
in Active
Markets
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3) Total 
 (in millions) 
 Assets 
 
 Investment securities: 
 
 
 
 
 
 Available-for-sale securities 1 
 $ 20 $ 299 $ — $ 319 $ 36 $ 256 $ — $ 292 
 Derivative instruments 2 : 
 
 Foreign exchange contracts — 35 — 35 — 206 — 206 
 
 Marketable securities 3 : 
 
 Equity securities 203 — — 203 237 — — 237 
 
 
 
 Liabilities 
 
 Derivative instruments 2 : 
 
 Foreign exchange contracts $ — $ 160 $ — $ 160 $ — $ 36 $ — $ 36 
 Interest rate contracts — 27 — 27 — 63 — 63 
 
 

 1 The Company’s U.S. 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. The fair value of the Company’s available-for-sale non-U.S. government and agency securities, corporate and asset-backed 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. 
 2 The Company’s foreign exchange and interest rate derivative asset and liability contracts measured at fair value are based on observable inputs such as broker quotes for similar derivative instruments. See Note 21 (Derivative and Hedging Instruments) for further details. 
 3 The Company’s Marketable securities are publicly held and fair values are based on unadjusted quoted prices in their respective active markets. 
 
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 Nonrecurring Measurements 
 Nonmarketable Securities 
 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. 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. 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. Observable price changes in orderly transactions for identical or similar investments of the same issuer could also result in fair value adjustments. See Note 5 (Investments) for further details. 
 Financial Instruments - Not Carried at Fair Value 
 Debt 
 Debt instruments are carried on the consolidated balance sheets at amortized cost. The Company estimates the fair value of its debt based on either market quotes or observable market data. Debt is classified as Level 2 of the Valuation Hierarchy as it is generally not traded in active markets. At December 31, 2025, the carrying value and fair value of debt was $ 19.0 billion and $ 18.0 billion, respectively. At December 31, 2024, the carrying value and fair value of debt was $ 18.2 billion and $ 16.8 billion, respectively. See Note 13 (Debt) for further details. 
 Other Financial Instruments 
 Certain other financial instruments are carried on the consolidated balance sheets at cost or amortized cost basis, which approximates fair value due to their short-term, highly liquid nature. These instruments include cash and cash equivalents, restricted cash and restricted cash equivalents, restricted security deposits held for customers, time deposits, accounts receivable, settlement assets, accounts payable, settlement obligations and other accrued liabilities. 
 
 Note 7. Prepaid Expenses and Other Assets 
 Prepaid expenses and other current assets consisted of the following at December 31: 
 
 2025 2024 
 (in millions) 
 Customer incentives 
 $ 2,531 $ 1,854 
 Other 1,212 1,138 
 Total prepaid expenses and other current assets $ 3,743 $ 2,992 

 Other assets consisted of the following at December 31: 
 
 2025 2024 
 (in millions) 
 Customer incentives 
 $ 7,870 $ 6,550 
 Equity investments 1,705 1,607 
 Income taxes receivable 1,101 1,002 
 Other 939 800 
 Total other assets $ 11,615 $ 9,959 

 
 
 
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 Note 8. Property, Equipment and Right-of-Use Assets 
 Property, equipment and right-of-use assets consisted of the following at December 31: 
 
 2025 2024 
 (in millions) 
 Buildings, building equipment and land $ 744 $ 709 
 Equipment 2,347 2,118 
 Furniture and fixtures 105 101 
 Leasehold improvements 497 436 
 Operating lease right-of-use assets 1,366 1,167 
 Property, equipment and right-of-use assets 5,059 4,531 
 Less: Accumulated depreciation and amortization ( 2,756 ) ( 2,393 ) 
 Property, equipment and right-of-use assets, net $ 2,303 $ 2,138 

 Depreciation and amortization expense for the above property, equipment and right-of-use assets was $ 544 million, $ 519 million and $ 482 million for 2025, 2024 and 2023, respectively. 
 Operating lease ROU assets and operating lease liabilities are recorded on the consolidated balance sheets as follows at December 31: 
 
 2025 2024 
 (in millions) 
 Balance sheet location 
 Property, equipment and right-of-use assets, net $ 750 $ 681 
 Other current liabilities 157 133 
 Other liabilities 676 627 

 Operating lease amortization expense was $ 161 million, $ 145 million and $ 141 million for 2025, 2024 and 2023, respectively. As of December 31, 2025 and 2024, the weighted-average remaining lease term of operating leases was 7.2 and 8.0 years, respectively, and the weighted-average discount rate for operating leases was 3.6 % and 3.5 % , respectively. 
 The useful lives of the Company’s assets are as follows: 
 
 Asset Category Estimated Useful Life 
 Buildings 30 years 
 Building equipment 10 - 15 years 
 
 Equipment and furniture and fixtures 
 2 - 6 years 
 
 Leasehold improvements Shorter of life of improvement or lease term 
 Right-of-use assets Shorter of life of the asset or lease term 

 The following table summarizes the maturity of the Company’s operating lease liabilities at December 31, 2025 based on lease term: 
 
 (in millions) 
 
 2026 $ 187 
 2027 151 
 2028 126 
 2029 101 
 2030 87 
 Thereafter 306 
 Total operating lease payments 958 
 Less: Interest ( 125 ) 
 Present value of operating lease liabilities $ 833 

 
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 Note 9. Goodwill 
 The changes in the carrying amount of goodwill for the years ended December 31 were as follows: 
 
 2025 2024 
 (in millions) 
 Beginning balance $ 9,193 $ 7,660 
 Additions — 1,736 
 Foreign currency translation 367 ( 203 ) 
 
 Ending balance $ 9,560 $ 9,193 

 The Company performed its annual qualitative assessment of goodwill during the fourth quarter of 2025 and determined a quantitative assessment was not necessary. The Company concluded that goodwill was not impaired and had no accumulated impairment losses at December 31, 2025. 
 
 Note 10. Other Intangible Assets 
 The following table sets forth net intangible assets, other than goodwill, at December 31: 
 
 2025 2024 
 Gross Carrying Amount 
 Accumulated Amortization 
 Net Carrying Amount 
 Gross Carrying Amount 
 Accumulated Amortization 
 Net Carrying Amount 
 
 (in millions) 
 Finite-lived intangible assets 
 
 Capitalized software 1 
 $ 5,415 $ ( 2,110 ) $ 3,305 $ 4,797 $ ( 1,640 ) $ 3,157 
 Customer relationships 2,967 ( 942 ) 2,025 2,804 ( 720 ) 2,084 
 Other 96 ( 44 ) 52 99 ( 40 ) 59 
 Total 8,478 ( 3,096 ) 5,382 7,700 ( 2,400 ) 5,300 
 Indefinite-lived intangible assets 
 
 Customer relationships 172 — 172 153 — 153 
 Total $ 8,650 $ ( 3,096 ) $ 5,554 $ 7,853 $ ( 2,400 ) $ 5,453 

 1 Includes technology acquired in business combinations. 
 The increase in the gross carrying amount of finite-lived intangible assets in 2025 was primarily related to software additions to support the continued growth of the Company. Certain intangible assets are denominated in foreign currencies. As such, the change in intangible assets includes a component attributable to foreign currency translation. Based on the qualitative assessment performed in 2025, it was determined that the Company’s indefinite-lived intangible assets were not impaired. 
 Amortization on the finite-lived intangible assets above amounted to $ 760 million, $ 523 million and $ 457 million in 2025, 2024 and 2023, respectively. The following table sets forth the estimated future amortization expense on finite-lived intangible assets on the consolidated balance sheets at December 31, 2025: 
 
 (in millions) 
 2026 $ 801 
 2027 765 
 2028 692 
 2029 647 
 2030 569 
 Thereafter 1,908 
 Total $ 5,382 

 
 
 
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 Note 11. Accrued Expenses 
 Accrued expenses consisted of the following at December 31: 
 
 2025 2024 
 (in millions) 
 Customer incentives 
 $ 9,958 $ 7,627 
 Personnel costs 1,716 1,681 
 Income and other taxes 914 454 
 Other 684 631 
 Total accrued expenses $ 13,272 $ 10,393 

 As of December 31, 2025 and 2024, long-term customer incentives included in other liabilities were $ 3,041 million and $ 2,820 million, respectively. 
 
 Note 12. Pension, Postretirement and Savings Plans 
 The Company and certain of its subsidiaries maintain various pension and other postretirement plans that cover substantially all employees worldwide. 
 Defined Contribution Plans 
 The Company sponsors defined contribution retirement plans. The primary plan is the Mastercard Savings Plan, a 401(k) plan for substantially all of the Company’s U.S. employees, which is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended. In addition, the Company has several defined contribution plans outside of the U.S. The Company’s total expense for its defined contribution plans was $ 302 million, $ 287 million and $ 253 million in 2025, 2024 and 2023, respectively. 
 Defined Benefit and Other Postretirement Plans 
 The Company sponsors pension and postretirement plans for certain non-U.S. employees (the “non-U.S. Plans”) that cover various benefits specific to their country of employment. Additionally, the Company sponsors a defined benefit pension plan in the United Kingdom (the “U.K. 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. The term “Pension Plans” includes the non-U.S. Plans and the U.K. Plan. 
 The Company maintains a postretirement plan providing health coverage and life insurance benefits for substantially all of its U.S. employees hired before July 1, 2007 (the “Postretirement Plan”). 
 The Company uses a December 31 measurement date for the Pension Plans and its Postretirement Plan. The benefit obligation associated with the Postretirement Plan is immaterial. The following table sets forth the components of the Pension Plans recognized on the Company’s consolidated balance sheets at December 31: 
 
 2025 2024 
 (in millions) 
 Fair value of plan assets $ 499 $ 454 
 Projected benefit obligation 452 410 
 Accumulated benefit obligation 450 408 
 Funded Status 
 47 44 

 As of December 31, 2025 and 2024, the amount recognized in accumulated other comprehensive income (loss), before tax, for the Postretirement Plan was $ 3 million and $ 10 million, respectively. As of December 31, 2025 and 2024, the amount recognized in accumulated other comprehensive income (loss), before tax, for the Pension Plans was $( 15 ) million, and $( 14 ) million, respectively. 
 
 
 
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 Note 13. Debt 
 Debt consisted of the following at December 31: 
 
 2025 2024 Effective
Interest Rate 
 (in millions) 
 Senior Notes 
 2025 USD Notes 
 Floating Rate Senior Notes due March 2028 
 $ 300 $ — ** 
 4.550 % Senior Notes due March 2028 
 450 — 4.727 % 
 4.950 % Senior Notes due March 2032 
 500 — 5.063 % 
 
 2024 USD Notes 
 4.100 % Senior Notes due January 2028 
 750 750 4.262 % 
 4.350 % Senior Notes due January 2032 
 1,150 1,150 4.446 % 
 4.550 % Senior Notes due January 2035 
 1,100 1,100 4.633 % 
 4.875 % Senior Notes due May 2034 
 1,000 1,000 5.047 % 
 
 2023 USD Notes 4.875 % Senior Notes due March 2028 750 750 5.003 % 
 4.850 % Senior Notes due March 2033 750 750 4.923 % 
 
 2022 EUR Notes 
 1.000 % Senior Notes due February 2029 882 781 1.138 % 
 
 2021 USD Notes 2.000 % Senior Notes due November 2031 750 750 2.112 % 
 1.900 % Senior Notes due March 2031 600 600 1.981 % 
 2.950 % Senior Notes due March 2051 700 700 3.013 % 
 
 2020 USD Notes 3.300 % Senior Notes due March 2027 1,000 1,000 3.420 % 
 3.350 % Senior Notes due March 2030 1,500 1,500 3.430 % 
 3.850 % Senior Notes due March 2050 1,500 1,500 3.896 % 
 
 2019 USD Notes 2.950 % Senior Notes due June 2029 1,000 1,000 3.030 % 
 3.650 % Senior Notes due June 2049 1,000 1,000 3.689 % 
 2.000 % Senior Notes due March 2025 — 750 2.147 % 
 
 2018 USD Notes 3.500 % Senior Notes due February 2028 500 500 3.598 % 
 3.950 % Senior Notes due February 2048 500 500 3.990 % 
 
 2016 USD Notes 2.950 % Senior Notes due November 2026 750 750 3.044 % 
 3.800 % Senior Notes due November 2046 600 600 3.893 % 
 
 2015 EUR Notes 
 2.100 % Senior Notes due December 2027 941 833 2.189 % 
 2.500 % Senior Notes due December 2030 176 156 2.562 % 
 
 
 
 
 
 
 
 19,149 18,420 
 Less: Unamortized discount and debt issuance costs ( 122 ) ( 131 ) 
 Less: Cumulative hedge accounting fair value adjustments 1 
 ( 27 ) ( 63 ) 
 Total debt outstanding 19,000 18,226 
 Less: Short-term debt 2 
 ( 749 ) ( 750 ) 
 Long-term debt $ 18,251 $ 17,476 

 ** The $ 300 million of Senior Notes due March 2028 are Floating Rate Notes that bear interest at a floating rate, reset quarterly, equal to the Compounded Secured Overnight Financing Rate (“SOFR”) plus 0.44 %. 
 1 The Company has an interest rate swap that is accounted for as a fair value hedge. See Note 21 (Derivative and Hedging Instruments) for additional information. 
 2 As of December 31, 2025, the 2016 USD Notes due November 2026 were classified as short-term debt, net of unamortized discount and debt issuance costs, on the consolidated balance sheets. As of December 31, 2024, the 2019 USD Notes due March 2025 were classified as short-term debt, net of unamortized discount and debt issuance costs, on the consolidated balance sheets. 
 For the years ended December 31, 2025, 2024 and 2023, interest paid on the Company’s debt was $ 680 million, $ 571 million and $ 477 million, respectively. 
 
 
 
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 Scheduled annual maturities of the principal portion of debt outstanding at December 31, 2025 are summarized below. 
 
 (in millions) 
 2026 $ 750 
 2027 1,941 
 2028 2,750 
 2029 1,882 
 2030 1,676 
 Thereafter 10,150 
 Total $ 19,149 

 Senior Notes 
 In February 2025, the Company issued $ 300 million principal amount of Floating Rate Notes due March 2028, $ 450 million principal amount of 4.550 % notes due March 2028 and $ 500 million principal amount of 4.950 % notes due March 2032 (collectively, the “2025 USD Notes”). The net proceeds from the issuance of the 2025 USD Notes, after deducting the original issue discount, underwriting discount and offering expenses, were $ 1.242 billion. 
 During 2024, the Company issued a total of $ 4 billion of debt, as follows: 
 • In May 2024, the Company issued $ 1 billion principal amount of notes due May 2034 
 • In September 2024, the Company issued $ 750 million principal amount of notes due January 2028, $ 1,150 million principal amount of notes due January 2032 and $ 1,100 million principal amount of notes due January 2035 
 The issuances in 2024 are collectively referred to as the “2024 USD Notes”. The net proceeds from the issuance of the 2024 USD Notes, after deducting the original issue discount, underwriting discount and offering expenses, were $ 3.96 billion. 
 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”). 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. 
 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. These notes are senior unsecured obligations and would rank equally with any future unsecured and unsubordinated indebtedness. 
 Indian Rupee (“INR”) Term Loan 
 In April 2023, the Company entered into an unsecured INR 4.97 billion term loan, due July 2023 (the “April 2023 INR Term Loan”). 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). In July 2023, the Company modified and combined the April 2023 INR Term Loan with a separate INR 22.6 billion term loan entered into in 2022 (collectively, the “2023 INR Term Loan”), increasing the total unsecured loans to INR 28.1 billion ($ 342 million as of the date of settlement). The 2023 INR Term Loan matured in July 2024. 
 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. 
 Commercial Paper Program and Credit Facility 
 As of December 31, 2025, 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. The Commercial Paper Program is available in U.S. dollars. 
 In conjunction with the Commercial Paper Program, the Company has a committed five-year unsecured $ 8 billion revolving credit facility (the “Credit Facility”). The Credit Facility, which previously was set to expire on November 7, 2029, was amended and extended and now expires on November 7, 2030. Borrowings under the Credit Facility are available in U.S. dollars and/or euros. 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. In addition to the facility fee, interest rates on borrowings under the Credit Facility would be based on prevailing market interest rates plus applicable margins that fluctuate based on the Company’s credit rating. The Credit Facility contains customary representations, warranties, affirmative and negative covenants, events of default and 
 
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 indemnification provisions. The Company was in compliance in all material respects with the covenants of the Credit Facility at December 31, 2025 and 2024. 
 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. The Company may borrow and repay amounts under the Commercial Paper Program and Credit Facility for business continuity purposes. The Company had no borrowings under the Credit Facility or the Commercial Paper Program at December 31, 2025 and 2024. 
 
 Note 14. Stockholders' Equity 
 Classes of Capital Stock 
 Mastercard’s amended and restated certificate of incorporation authorizes the following classes of capital stock: 
 
 Class Par Value Per Share Authorized Shares 
(in millions) Dividend and Voting Rights 
 A $ 0.0001 3,000 One vote per share 
Dividend rights 
 B $ 0.0001 1,200 Non-voting
Dividend rights 
 Preferred $ 0.0001 300 No shares issued or outstanding at December 31, 2025 and 2024. Dividend and voting rights are to be determined by the Board of Directors of the Company upon issuance. 

 Dividends 
 The Company declared a quarterly cash dividend on its Class A and Class B Common Stock during each of the four quarters of 2025, 2024 and 2023. The total per share dividends declared during the years ended December 31 are summarized below: 
 
 2025 2024 2023 
 (in millions, except per share data) 
 
 Dividends declared per share $ 3.15 $ 2.74 $ 2.37 
 Total dividends declared $ 2,840 $ 2,526 $ 2,231 

 Ownership and Governance Structure 
 Equity ownership and voting power of the Company’s shares were allocated as follows as of December 31: 
 
 2025 2024 
 Equity Ownership General Voting Power Equity Ownership General Voting Power 
 Class A stockholders 
 99.3 % 100.0 % 99.3 % 100.0 % 
 
 Class B stockholders (Principal or Affiliate Customers) 
 0.7 % — % 0.7 % — % 

 Note: Table may not sum due to rounding. 
 Class B Common Stock Conversions 
 Shares of Class B common stock are convertible on a one-for-one basis into shares of Class A common stock. 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. Class B stockholders are required to subsequently sell or otherwise transfer any shares of Class A common stock received pursuant to such a conversion. 
 
 
 
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 Common Stock Activity 
 The following table presents the changes in the Company’s outstanding Class A and Class B common stock: 
 
 Outstanding Shares 
 Class A Class B 
 (in millions) 
 Balance at December 31, 2022 948.4 7.6 
 Purchases of treasury stock ( 23.8 ) — 
 Share-based payments 2.3 — 
 Conversion of Class B to Class A common stock 0.4 ( 0.4 ) 
 Balance at December 31, 2023 927.3 7.2 
 Purchases of treasury stock ( 23.0 ) — 
 Share-based payments 1.9 — 
 Conversion of Class B to Class A common stock 0.4 ( 0.4 ) 
 Balance at December 31, 2024 906.6 6.8 
 Purchases of treasury stock ( 21.1 ) — 
 Share-based payments 1.6 — 
 Conversion of Class B to Class A common stock 0.2 ( 0.2 ) 
 Balance at December 31, 2025 887.3 6.6 

 The Company’s Board of Directors has approved programs authorizing the Company to repurchase shares of its Class A common stock. The following table summarizes the Company’s share repurchase authorizations of its Class A common stock for the years ended December 31: 
 
 2025 2024 2023 
 (In millions, except per share data) 
 Board authorization $ 14,000 $ 12,000 $ 11,000 
 Dollar-value of shares repurchased 
 $ 11,727 $ 10,954 $ 9,032 
 Shares repurchased 21.1 23.0 23.8 
 Average price paid per share $ 555.78 $ 475.35 $ 379.49 

 As of December 31, 2025, the remaining authorization under the share repurchase programs approved by the Company’s Board of Directors was $ 17.5 billion. 
 The Company repurchased an additional $ 1.1 billion dollar-value of shares in 2026, through February 6, 2026. As of February 6, 2026, the remaining authorization under the share repurchase programs approved by the Company’s Board of Directors was $ 16.3 billion. 
 
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 Note 15. Accumulated Other Comprehensive Income (Loss) 
 The changes in the balances of each component of accumulated other comprehensive income (loss), net of tax, for the years ended December 31, 2025 and 2024 were as follows: 
 
 December 31, 2024 Increase / (Decrease) Reclassifications December 31, 2025 
 (in millions) 
 Foreign currency translation adjustments 1 
 $ ( 1,558 ) $ 524 $ — $ ( 1,034 ) 
 Translation adjustments on net investment hedges 2 
 295 ( 169 ) — 126 
 Cash flow hedges 
 
 Foreign exchange contracts 3 
 ( 51 ) ( 281 ) 378 46 
 Interest rate contracts ( 113 ) — 6 ( 107 ) 
 Defined benefit pension and other postretirement plans 
 ( 6 ) ( 6 ) — ( 12 ) 
 Investment securities available-for-sale — — — — 
 Accumulated other comprehensive income (loss) $ ( 1,433 ) $ 68 $ 384 $ ( 981 ) 

 
 December 31, 2023 Increase / (Decrease) Reclassifications December 31, 2024 
 (in millions) 
 Foreign currency translation adjustments 1 
 $ ( 1,119 ) $ ( 439 ) $ — $ ( 1,558 ) 
 Translation adjustments on net investment hedges 2 
 181 114 — 295 
 Cash flow hedges 
 Foreign exchange contracts 3 
 ( 17 ) 149 ( 183 ) ( 51 ) 
 Interest rate contracts ( 118 ) — 5 ( 113 ) 
 Defined benefit pension and other postretirement plans 
 ( 25 ) 19 — ( 6 ) 
 Investment securities available-for-sale ( 1 ) 1 — — 
 Accumulated other comprehensive income (loss) $ ( 1,099 ) $ ( 156 ) $ ( 178 ) $ ( 1,433 ) 

 1 During 2025, 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. dollar. During 2024, the increase in the accumulated other comprehensive loss related to foreign currency translation adjustments was driven primarily by the depreciation of the euro, Brazilian real, and British pound against the U.S. dollar. 
 2 During 2025, 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. dollar. During 2024, the increase in the accumulated other comprehensive income related to the net investment hedges was driven by the depreciation of the euro and British pound against the U.S. dollar. See Note 21 (Derivative and Hedging Instruments) for additional information. 
 3 Certain foreign exchange derivative contracts are designated as cash flow hedging instruments. 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 statements of operations when the underlying hedged transactions impact earnings. See Note 21 (Derivative and Hedging Instruments) for additional information. 
 
 Note 16. Share-Based Payments 
 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”). The LTIP is a stockholder-approved plan that permits the grant of various types of equity awards to employees. The Company has granted Options, RSUs and PSUs under the LTIP. The Company uses the straight-line method of attribution for expensing all equity awards. Compensation expense is recorded net of estimated forfeitures, with estimates adjusted as appropriate. 
 There are approximately 116 million shares of Class A common stock authorized for equity awards under the LTIP. Although the LTIP permits the issuance of shares of Class B common stock, no such shares have been authorized for issuance. 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. 
 
 
 
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 Stock Options 
 Options expire ten years from the date of grant and vest ratably over three years . For Options granted, a participant’s unvested awards are forfeited upon termination; however, 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. Retirement eligibility is dependent upon age and years of service. Compensation expense is recognized over the vesting period as stated in the LTIP. 
 The fair value of each Option is estimated on the date of grant using a Black-Scholes option pricing model. 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: 
 
 2025 2024 2023 
 Risk-free rate of return 4.1 % 4.2 % 4.2 % 
 Expected term (in years) 6.00 6.00 6.00 
 Expected volatility 27.4 % 28.7 % 29.5 % 
 Expected dividend yield 0.5 % 0.6 % 0.6 % 
 Weighted-average fair value per Option granted $ 192.87 $ 164.66 $ 123.22 

 The risk-free rate of return was based on the U.S. Treasury yield curve in effect on the date of grant. The expected term and the expected volatility were based on historical Mastercard information. The expected dividend yields were based on the Company’s expected annual dividend rate on the date of grant. 
 The following table summarizes the Company’s Option activity for the year ended December 31, 2025: 
 
 Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value 
 (in millions) (in years) (in millions) 
 Outstanding at January 1, 2025 2.1 $ 273 
 Granted 0.2 $ 574 
 Exercised ( 0.5 ) $ 196 
 Forfeited — $ 453 
 
 Outstanding at December 31, 2025 1.8 $ 325 5.2 $ 432 
 Exercisable at December 31, 2025 1.4 $ 274 4.2 $ 403 
 Options vested and expected to vest at December 31, 2025 1.8 $ 325 5.2 $ 432 

 As of December 31, 2025, there was $ 14 million of total unrecognized compensation cost related to non-vested Options. The cost is expected to be recognized over a weighted-average period o f 1.7 years. 
 Restricted Stock Units 
 RSUs generally vest ratably over three years . A participant’s unvested awards are forfeited upon termination of employment; however, in the event of termination due to job elimination (as defined by the Company), a participant will retain a pro-rata portion of the unvested awards for services performed through the date of termination. 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. 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 . 
 
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 The following table summarizes the Company’s RSU activity for the year ended December 31, 2025: 
 
 Units Weighted-Average Grant-Date Fair Value Aggregate Intrinsic Value 
 (in millions) (in millions) 
 Outstanding at January 1, 2025 2.1 $ 403 
 Granted 1.0 $ 566 
 Converted ( 1.1 ) $ 385 
 Forfeited ( 0.1 ) $ 470 
 Outstanding at December 31, 2025 1.9 $ 498 $ 1,070 
 RSUs expected to vest at December 31, 2025 1.8 $ 498 $ 1,032 

 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. Upon vesting, a portion of the RSU award may be withheld to satisfy the minimum statutory withholding taxes. The remaining RSUs will be settled in shares of the Company’s Class A common stock after the vesting period. As of December 31, 2025, there was $ 465 million of total unrecognized compensation cost related to non-vested RSUs. The cost is expected to be recognized over a weighted-average period of 1.8 years. 
 Performance Stock Units 
 PSUs vest after three years and are subject to a mandatory one-year post-vest hold, during which they are eligible for dividend equivalents. A participant’s unvested awards are forfeited upon termination of employment; however, in the event of termination due to job elimination (as defined by the Company), a participant will retain a pro-rata portion of the unvested awards for services performed through the date of termination. 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. 
 The following table summarizes the Company’s PSU activity for the year ended December 31, 2025: 
 
 Units Weighted-Average 
Grant-Date Fair Value Aggregate Intrinsic Value 
 (in millions) (in millions) 
 Outstanding at January 1, 2025 0.6 $ 396 
 Granted 0.2 $ 608 
 Converted ( 0.2 ) $ 335 
 Other — $ 364 
 Outstanding at December 31, 2025 0.6 $ 472 $ 335 
 PSUs expected to vest at December 31, 2025 0.6 $ 472 $ 331 

 Since 2013, PSUs containing performance and market conditions have been issued. 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”). Relative TSR is considered a market condition, while net revenue and EPS growth are considered performance conditions. The Monte Carlo simulation valuation model is used to determine the grant-date fair value. 
 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. As of December 31, 2025, there was $ 31 million of total unrecognized compensation cost related to non-vested PSUs. The cost is expected to be recognized over a weighted-average period of 1.6 years. 
 
 
 
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 Additional Information 
 The following table includes additional share-based payment information for each of the years ended December 31: 
 
 2025 2024 2023 
 (in millions, except weighted-average fair value) 
 Share-based compensation expense 
 $ 597 $ 526 $ 460 
 Income tax benefit recognized for equity awards 128 111 99 
 Income tax benefit realized related to Options exercised 26 77 95 
 
 Options 
 
 Total intrinsic value of Options exercised 180 354 487 
 RSUs 
 
 Weighted-average grant-date fair value of awards granted 566 472 350 
 Total grant-date fair value of awards vested 421 340 235 
 Total intrinsic value of RSUs converted into shares of Class A common stock 622 477 253 
 PSUs 
 
 Weighted-average grant-date fair value of awards granted 608 512 365 
 Total grant-date fair value of awards vested 79 99 12 
 Total intrinsic value of PSUs converted into shares of Class A common stock 135 122 14 
 
 
 

 
 
 Note 17. Commitments 
 At December 31, 2025, the Company had the following future minimum payments due under noncancelable agreements, primarily related t o sponsorships to promote the Mastercard brand and licensing arrangements. The amount accrued related to these future payments as of December 31, 2025 was not material. 
 
 (in millions) 
 2026 $ 714 
 2027 581 
 2028 291 
 2029 131 
 2030 115 
 Thereafter 201 
 Total $ 2,033 

 
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 Note 18. Income Taxes 
 Components of Income and Income Tax Expense 
 The domestic and foreign components of income before income taxes for the years ended December 31 were as follows: 
 
 2025 2024 2023 
 (in millions) 
 United States $ 6,652 $ 6,168 $ 4,506 
 Foreign 11,926 9,086 9,133 
 Income before income taxes $ 18,578 $ 15,254 $ 13,639 

 The total income tax provision for the years ended December 31 was comprised of the following components: 
 
 2025 2024 2023 
 (in millions) 
 Current 
 Federal $ 1,265 $ 1,093 $ 991 
 State and local ( 198 ) 144 127 
 Foreign 2,486 1,670 1,563 
 Total current 
 3,553 2,907 2,681 
 
 Deferred 
 Federal ( 173 ) ( 197 ) ( 180 ) 
 State and local 32 ( 14 ) ( 18 ) 
 Foreign 198 ( 316 ) ( 39 ) 
 Total deferred 
 57 ( 527 ) ( 237 ) 
 
 Income tax expense $ 3,610 $ 2,380 $ 2,444 

 
 
 
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 Effective Income Tax Rate 
 A reconciliation of the effective income tax rate to the U.S. federal statutory income tax rate for the years ended December 31, was as follows: 
 
 2025 2024 2023 
 Amount Percent Amount Percent Amount Percent 
 ($ in millions) 
 Income before income taxes $ 18,578 $ 15,254 $ 13,639 
 
 Federal statutory tax 3,901 21.0 % 3,203 21.0 % 2,864 21.0 % 
 Foreign tax effects 
 
 Singapore 
 
 Statutory tax rate difference between Singapore and U.S. 
 ( 161 ) ( 0.9 ) % ( 162 ) ( 1.1 ) % ( 147 ) ( 1.1 ) % 
 Singapore tax incentive 
 ( 330 ) ( 1.8 ) % ( 644 ) ( 4.2 ) % ( 571 ) ( 4.2 ) % 
 Pillar 2 Rules 
 233 1.3 % — — % — — % 
 Other foreign jurisdictions 
 408 2.2 % 240 1.6 % 374 2.7 % 
 Effects of cross border tax laws 
 
 Foreign-derived intangible income deduction ( 204 ) ( 1.1 ) % ( 195 ) ( 1.3 ) % ( 144 ) ( 1.1 ) % 
 U.S. foreign tax credits 
 ( 259 ) ( 1.4 ) % ( 224 ) ( 1.5 ) % 73 0.5 % 
 Other 
 140 0.8 % 77 0.5 % 110 0.8 % 
 
 Effects of changes in tax law 
 — — % — — % ( 688 ) ( 5.0 ) % 
 Valuation allowance 
 76 0.4 % 113 0.7 % 644 4.7 % 
 Other, net $ ( 194 ) ( 1.0 ) % ( 28 ) ( 0.2 ) % ( 71 ) ( 0.5 ) % 
 Income tax expense $ 3,610 19.4 % $ 2,380 15.6 % $ 2,444 17.9 % 

 Note: Table may not sum due to rounding. 
 As of January 1, 2025, the Company adopted new FASB guidance related to income tax disclosures on a retrospective basis. 
 The effective income tax rates for the years ended December 31, 2025, 2024 and 2023 were 19.4 %, 15.6 % and 17.9 %, respectively. The effective income tax rate for 2025 was higher than the effective income tax rate for 2024, primarily due to a change in the net tax effect of the Company’s Singapore operations, which includes the 15% global minimum tax (Pillar 2 Rules) that took effect in 2025. Additionally, a change in the Company’s geographic mix of earnings contributed to the higher effective income tax rate, partially offset by net discrete tax benefits. 
 The effective income tax rate for 2024 was lower than the effective income tax rate for 2023, primarily due to the 2023 foreign tax legislation enacted in Brazil and Notice 2023-55 (the “Notice”), released by the U.S. Department of Treasury (“Treasury”) in 2023. The foreign tax legislation and the Notice changed the treatment of foreign taxes paid under the U.S. tax regulations published in 2022, resulting in an expense in 2023 to establish a valuation allowance against the U.S. foreign tax credit carryforward deferred tax asset. The expense is partially offset by the Company’s ability to claim more U.S. foreign tax credits generated in 2022 and 2023. Additionally, a change in the Company’s geographic mix of earnings in 2024 contributed to the lower effective income tax rate compared to the prior year. 
 Singapore Income Tax Rate 
 In connection with the expansion of the Company’s operating headquarters in Singapore, the Company received in 2010 a tax incentive from the Singapore Ministry of Finance, which had been set to expire on December 31, 2025. Effective January 1, 2025, the Company received a new tax incentive from the ministry, which replaced the expiring tax incentive and continues through December 31, 2029. The tax incentive provides the Company with, among other benefits, a reduced income tax rate from the 17 % Singapore statutory income tax rate. For 2025, 2024 and 2023, the impacts of the tax incentives received from the ministry resulted in a reduction of the Company’s income tax liability of $ 330 million, or $ 0.36 per diluted share, $ 644 million, or $ 0.69 per diluted share, and $ 571 million, or $ 0.60 per diluted share, respectively. The Pillar 2 Rules that took effect in 2025 in Singapore largely offsets the reduction to the Company’s effective income tax rate resulting from the tax incentive. 
 
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 Income Taxes Paid 
 T he Company paid income taxes, net of refunds, by jurisdiction for the years ended December 31, as follows: 
 
 2025 2024 2023 
 (in millions) 
 
 Federal 
 $ 1,359 $ 1,279 $ 1,194 
 State 
 95 155 133 
 Foreign 
 
 Belgium 
 668 562 516 
 United Kingdom 
 330 592 429 
 Brazil 
 168 333 254 
 Other 
 400 331 220 
 Total 
 $ 3,020 $ 3,252 $ 2,746 
 

 Income taxes paid are not directly linked to the income tax expense recognized in the consolidated statements of operations, as cash payments reflect the timing of estimated payments, refunds, audit settlements and the utilization of tax attributes rather than the current period tax provision. 
 Deferred Income Taxes 
 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. The components of deferred tax assets and liabilities at December 31 were as follows: 
 
 2025 2024 
 (in millions) 
 Deferred tax assets 
 
 Accrued liabilities $ 1,079 $ 939 
 Compensation and benefits 408 371 
 Net operating losses 221 468 
 U.S. foreign tax credits 802 736 
 Property and equipment 
 482 432 
 Intangible assets 169 160 
 Lease liabilities 
 143 134 
 Other items 246 236 
 Less: Valuation allowance ( 974 ) ( 871 ) 
 Total deferred tax assets 
 2,576 2,605 
 
 Deferred tax liabilities 
 
 Prepaid expenses and other accruals 280 195 
 Gains on equity investments 111 112 
 Goodwill and intangible assets 718 760 
 Right-of-use lease assets 
 124 116 
 Other items 83 125 
 Total deferred tax liabilities 
 1,316 1,308 
 
 Net deferred tax assets 
 $ 1,260 $ 1,297 

 
 
 
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 The changes in the Company’s valuation allowance on deferred tax assets were as follows: 
 
 Balance at December 31, 2022 
 Changes to Related Gross Deferred Tax Assets 
 Change/(Release) 
 Balance at December 31, 2023 
 Changes to Related Gross Deferred Tax Assets 
 Change/(Release) 
 Balance at December 31, 2024 
 Changes to Related Gross Deferred Tax Assets 
 Change/(Release) 
 Balance at December 31, 2025 
 
 (in millions) 
 U.S. foreign tax credit carryforward 1 
 $ — $ 308 $ 327 $ 635 $ 101 $ — $ 736 $ 66 $ — $ 802 
 Net operating and capital losses 2 
 114 12 ( 3 ) 123 11 1 135 34 3 172 
 Total $ 114 $ 320 $ 324 $ 758 $ 112 $ 1 $ 871 $ 100 $ 3 $ 974 

 1 The 2023 activity resulted in the establishment of the valuation allowance associated with the U.S. foreign tax credit carryforward due to foreign tax legislation enacted in Brazil and the Notice released by Treasury. 
 2 Capital losses are included within other items in the deferred tax assets section of the components of the Deferred Income Taxes table above. 
 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. federal income tax law. The recognition of the net operating and capital losses is dependent on the timing and character of future taxable income in the applicable jurisdictions. As of December 31, 2025, the Company had a foreign tax credit carryforward and tax effected net operating loss carryforwards of $ 802 million and $ 221 million, respectively. The foreign tax credits begin to expire in 2029 and the majority of the net operating losses can be carried forward indefinitely. 
 A reconciliation of the beginning and ending balance for the Company’s unrecognized tax benefits for the years ended December 31, was as follows: 
 
 2025 2024 2023 
 (in millions) 
 Beginning balance $ 304 $ 431 $ 414 
 Additions: 
 Current year tax positions 38 37 23 
 Prior year tax positions 1 
 68 34 16 
 Reductions: 
 Prior year tax positions 1 
 ( 93 ) ( 189 ) ( 7 ) 
 Settlements with tax authorities — — — 
 Expired statute of limitations ( 6 ) ( 9 ) ( 15 ) 
 Ending balance $ 311 $ 304 $ 431 

 
 1 Includes immaterial translational impact of currency. 
 As of December 31, 2025, the amount of unrecognized tax benefit was $ 311 million. This amount, if recognized, would reduce income tax expense by $ 252 million. 
 The Company is subject to tax in the United States, Belgium, Singapore, the United Kingdom and various other foreign jurisdictions, as well as state and local jurisdictions. 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. 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. 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. The Company has effectively settled its U.S. federal income tax obligations through 2014. With limited exception, the Company is no longer subject to state and local or foreign examinations by tax authorities for years before 2014. 
 
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 Note 19. Legal and Regulatory Proceedings 
 Mastercard is a party to legal and regulatory proceedings with respect to a variety of matters in the ordinary course of business. Some of these proceedings are based on complex claims involving substantial uncertainties and unascertainable damages. 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. 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. 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. 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: (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. 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. 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. 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. Any of these events could have a material adverse effect on Mastercard’s results of operations, financial condition and overall business. 
 Cash paid for legal settlements for the years ended December 31, 2025, 2024 and 2023 was $ 647 million, $ 496 million and $ 929 million, respectively. 
 Interchange Litigation and Regulatory Proceedings 
 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. 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. 
 United States 
 In 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. 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. 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. The cases were consolidated for pre-trial proceedings in the U.S. District Court for the Eastern District of New York in MDL No. 1720 (the “U.S. MDL Litigation Cases”). The plaintiffs filed a consolidated class action complaint seeking treble damages. 
 In 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: (1) violate U.S. 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. The class plaintiffs sought treble damages and injunctive relief including, but not limited to, an order reversing and unwinding the IPO. 
 In 2011, Mastercard and Mastercard International entered into each of: (1) an omnibus judgment sharing and settlement sharing agreement with Visa Inc., Visa U.S.A. Inc. and Visa International Service Association and a number of financial institutions; and (2) a Mastercard settlement and judgment sharing agreement with a number of financial institutions. 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. MDL Litigation Cases. 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. In the event of a settlement involving only 
 
 
 
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 Mastercard and the financial institutions with respect to their issuance of Mastercard cards, Mastercard would pay 36 % of the monetary portion of such settlement. 
 In 2012, the parties entered into a definitive settlement agreement with respect to the U.S. 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. 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. The court granted final approval of the settlement in 2013. Following an appeal by objectors and as a result of a reversal of the settlement approval by the U.S. Court of Appeals for the Second Circuit, the case was sent back to the district court for further proceedings. 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. 
 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. The Damages Class settlement agreement became final in 2023. 
 Prior to the fourth quarter of 2025, Mastercard had reached settlements with over 250 opt-out merchants. In the fourth quarter of 2025, Mastercard reached settlements or agreements in principle to settle with the vast majority of the remaining individual opt-out merchants. The opt-out merchant settlements, along with the Damages Class settlement, represent over 90 % of Mastercard’s U.S. interchange volume. 
 Mastercard continues to litigate with two groups of remaining opt-out merchants. The first group includes seven opt-out merchants seeking aggregate single damages in excess of $ 1 billion with respect to their Mastercard purchase volume. A trial involving Circle K Stores is scheduled to commence in April 2026 and a trial involving the remaining six opt-out merchants is scheduled to commence in September 2026. The second group of opt-out merchants consists of Block and Intuit, each of whom are seeking damages for purchase volume in which they acted as a merchant, as well as the purchase volume associated with smaller merchants for whom they acted as payment facilitators. Discovery with respect to the second group is scheduled to be completed in the first quarter of 2026, and the exchange of expert reports and summary judgment briefing are expected to occur over the course of 2026. 
 In 2024, the parties to the Rules Relief Class litigation entered into a settlement agreement to resolve the Rules Relief Class claims, which was subsequently denied by the court. In November 2025, the parties reached a revised settlement agreement that, if approved by the court, would resolve the litigation. Briefing on preliminary approval of the settlement has been completed and the parties await the court’s decision. 
 As of December 31, 2025 and 2024, Mastercard accrued a liability of $ 637 million and $ 559 million, respectively, for the U.S. MDL Litigation Cases. The liability as of December 31, 2025 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. 
 Europe 
 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. Merchant claimants”). In addition, Mastercard has faced similar filed or threatened litigation by merchants with respect to interchange rates in other countries in Europe (the “Pan-European Merchant claimants”). Mastercard has resolved a substantial amount of these damages claims through settlement or judgment. Following these settlements, approximately £ 0.3 billion (approximately $ 0.4 billion as of December 31, 2025) of unresolved damages claims remain. Mastercard continues to litigate with the remaining U.K. and Pan-European Merchant claimants and it has submitted statements of defense disputing liability and damages claims. A number of those matters are now progressing with motion practice and discovery. Hearings involving both liability and damages issues involving multiple merchant cases have been completed. In June 2025, the trial court in the U.K. merchant action decided against Mastercard on certain liability issues. This decision, which Mastercard is seeking to appeal, does not determine the outcome of these claims. The court must still determine additional liability and damages issues, some of which have yet to be tried. 
 Additional United Kingdom matters. Mastercard and Visa were served with a proposed collective action complaint in the U.K. on behalf of merchants seeking damages for commercial card transactions in both the U.K. and the European Union. In 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, 2025). In June 2024, the court granted the plaintiffs’ collective action application. Mastercard’s request 
 
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 for permission to appeal this ruling was denied. Liability and damages issues in this claim are now being tried in the same court proceedings as the U.K. and Pan-European merchant cases. 
 In 2016, a proposed collective action was filed in the U.K. on behalf of U.K. 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 sought to leverage the European Commission’s 2007 decision on intra-EEA interchange fees, claimed damages in an amount that exceeded £ 10 billion (approximately $ 13 billion as of December 31, 2025). 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. In February 2024, the trial court ruled in Mastercard’s favor, finding no causal connection between the levels of Mastercard’s intra-EEA interchange fees and U.K. domestic interchange fees. 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. The plaintiffs’ request for permission to appeal this ruling was granted. In December 2024, the parties entered into a settlement agreement to resolve this matter and in May 2025, the trial court issued their written approval of the settlement. Following the trial court’s written approval, Mastercard paid the previously agreed upon settlement amount of £ 200 million ($ 263 million as of the date of payment), which was originally accrued in December 2024. The litigation funder for this claim is seeking permission to appeal (by way of judicial review) the trial court’s allocation of the settlement amount, including the allocation between the class and the funder. The funder is not seeking permission to appeal the trial court’s approval of the settlement itself. 
 Portugal. Mastercard has been named as a defendant in a proposed consumer collective action filed in Portugal on behalf of Portuguese consumers. The complaint, which seeks to leverage the 2019 resolution of the European Commission’s investigation of Mastercard’s central acquiring rules and interregional interchange fees, claims damages of approximately € 0.4 billion (approximately $ 0.5 billion as of December 31, 2025) for interchange fees that were allegedly passed on to consumers by Portuguese merchants for a period of approximately 20 years. Mastercard has submitted a statement of defense that disputes both liability and damages. 
 Netherlands. In July 2025, Mastercard and Visa were served with a proposed collective action in the Netherlands on behalf of Dutch merchants. The complaint, which relates to interregional interchange fees covering the period from 1992 and ongoing, seeks declaratory relief and damages estimated in excess of € 0.3 billion (approximately $ 0.4 billion as of December 31, 2025). 
 Australia 
 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. The ACCC seeks both declaratory relief and monetary fines and costs. A hearing on liability issues is scheduled for April 2026. 
 ATM Non-Discrimination Rule Surcharge Complaints 
 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. 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. Plaintiffs allege that Mastercard and Visa have violated Section 1 of the Sherman Act by imposing rules that require ATM operators to charge non-discriminatory ATM surcharges for transactions processed over Mastercard’s and Visa’s respective networks that are not greater than the surcharge for transactions over other networks accepted at the same ATM. 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. 
 Subsequently, multiple related complaints were filed in the U.S. 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. The claims in these actions largely mirrored the allegations made in the ATM Operators Class Complaint, although these complaints sought damages on behalf of consumers of ATM services who paid 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 sought both injunctive and monetary relief equal to treble the damages they claimed to have sustained as a result of the alleged violations and their costs of suit, including attorneys’ fees. 
 In 2023, the D.C. Circuit Court affirmed the district court’s previous order granting class certification to the plaintiffs in all three class complaints. 
 
 
 
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 In 2024, Mastercard executed a settlement agreement with the class lawyers representing the plaintiffs in the Bank ATM Consumer Class Complaint, subject to court approval, and recorded an accrual of $ 93 million in connection with this matter. In June 2025, the court issued a decision approving the settlement. 
 In August 2025, Mastercard executed a settlement agreement with the class lawyers representing the plaintiffs in the Non-bank ATM Consumer Class Complaint, subject to court approval. During the second quarter of 2025, Mastercard recorded an accrual of $ 79 million in connection with this matter. 
 The litigation with respect to the ATM Operators Class Complaint is ongoing. The plaintiffs in this class complaint allege over $ 1 billion in single damages against all of the defendants. 
 U.S. Liability Shift Litigation 
 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 alleged 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. The plaintiffs sought treble damages, attorney’s fees and costs and an injunction against future violations of governing law. The district court denied the Network Defendants’ motion to dismiss the complaint, but granted such a motion for EMVCo and the Bank Defendants. 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. In 2020, the district court issued an order granting the plaintiffs’ request for class certification. The plaintiffs submitted expert reports that allege aggregate single damages in excess of $ 1 billion against the four Network Defendants. The Network Defendants submitted expert reports rebutting both liability and damages. In September 2024, the district court denied the Network Defendants’ motion for summary judgment. In September 2025, Mastercard executed a settlement agreement with the class lawyers to resolve the matter, subject to court approval. During the third quarter of 2025, Mastercard recorded an accrual of $ 80 million in connection with this matter. 
 Telephone Consumer Protection Class Action 
 Mastercard is a defendant in a Telephone Consumer Protection Act (“TCPA”) class action pending in Florida. The plaintiffs are individuals and businesses who allege that approximately 381,000 unsolicited faxes were sent to them advertising a Mastercard co-brand card issued by First Arkansas Bank (“FAB”). The TCPA provides for uncapped statutory damages of $ 500 per fax. Mastercard has asserted various defenses to the claims, and has notified FAB of an indemnity claim that it has (which FAB has disputed). 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. 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. 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. 
 U.S. Department of Justice Investigation 
 In 2023, Mastercard received a Civil Investigative Demand (“CID”) from the U.S. Department of Justice Antitrust Division (“DOJ”) seeking documents and information regarding a potential violation of Sections 1 or 2 of the Sherman Act. The CID focuses on Mastercard’s U.S. debit program and competition with other payment networks and technologies. Mastercard is cooperating with the DOJ in connection with the CID. 
 European Commission Investigation 
 In 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. The request focuses on Mastercard’s practices regarding network fees related to acquirers. Mastercard is cooperating with the European Commission in connection with the request. 
 
 Note 20. Settlement and Other Risk Management 
 Mastercard’s rules guarantee the settlement of many of the payment network transactions between its customers (“settlement risk”). Settlement exposure is the settlement risk to customers under Mastercard’s rules due to the difference in timing between the payment transaction date and subsequent settlement. 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. The duration of the settlement exposure is short-term and generally limited to a few days. 
 
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 Gross settlement exposure is estimated using the average daily payment volume for the three months prior to period end multiplied by the estimated number of days of exposure. The Company has global risk management policies, procedures and standards that provide a framework for managing the Company’s settlement risk and exposure. In the event of failed settlement by a customer, Mastercard may pursue one or more remedies available under the Company’s rules to recover potential losses. Historically, the Company has experienced a low level of losses from customer settlement failures. 
 As part of its policies, Mastercard requires certain customers that do not meet the Company’s risk standards to enter into risk mitigation arrangements, including cash collateral and/or forms of credit enhancement such as letters of credit and guarantees. This requirement is based on a review of the individual risk circumstances for each customer. Mastercard monitors its credit risk portfolio and the adequacy of its risk mitigation arrangements on a regular basis. Additionally, the Company periodically reviews its risk management methodology and standards. The amounts of estimated settlement exposure are revised as necessary. 
 The Company’s estimated settlement exposure was as follows at December 31: 
 
 2025 2024 
 (in millions) 
 Gross settlement exposure $ 89,599 $ 78,385 
 Risk mitigation arrangements applied to settlement exposure 
 ( 16,722 ) ( 13,466 ) 
 Net settlement exposure 
 $ 72,877 $ 64,919 

 Mastercard also provides guarantees to customers and certain other counterparties indemnifying them from losses stemming from failures of third parties to perform duties. 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. Certain indemnifications do not provide a stated maximum exposure. 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. Historically, payments made by the Company under these types of contractual arrangements have not been material. 
 
 Note 21. 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. 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. 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. The Company does not enter into derivatives for speculative purposes. 
 The Company’s derivative financial instruments are subject to both market and counterparty credit risk. Market risk is the potential for economic losses to be incurred on market risk sensitive instruments arising from adverse changes in market factors such as foreign currency exchange rates, interest rates and other related variables. Counterparty credit risk is the risk of loss due to failure of the counterparty to perform its obligations in accordance with contractual terms. 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. Generally, the Company does not obtain collateral related to derivatives because of the high credit ratings of the counterparties. The Company’s derivative contracts are subject to enforceable master netting arrangements, which contain various netting and setoff provisions. However, the Company has elected to present derivative assets and liabilities on a gross basis on the consolidated balance sheets. 
 
 
 
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 The following table summarizes the fair value of the Company’s derivative financial instruments and the related notional amounts at December 31: 
 
 2025 2024 
 Notional Derivative assets 
 Derivative liabilities 
 Notional Derivative assets 
 Derivative liabilities 
 
 (in millions) 
 Derivatives designated as hedging instruments 
 Foreign exchange contracts in a cash flow hedge 1 
 $ 5,050 $ 16 $ 142 $ 3,951 $ 135 $ 6 
 Interest rate contracts in a fair value hedge 2 
 1,000 — 27 1,000 — 63 
 Foreign exchange contracts in a net investment hedge 1 
 — — — 2,511 54 — 
 Derivatives not designated as hedging instruments 
 Foreign exchange contracts 1 
 4,866 19 18 2,741 17 30 
 Total 
 $ 10,916 $ 35 $ 187 $ 10,203 $ 206 $ 99 

 1 Foreign exchange derivative assets and liabilities are included within prepaid expenses and other current assets, other assets, other current liabilities and other liabilities on the consolidated balance sheets. 
 2 Interest rate derivative liabilities are included within other current liabilities and other liabilities on the consolidated balance sheets. 
 Cash Flow Hedges 
 The Company may enter into foreign exchange derivative contracts, including forwards and options, to manage the impact of foreign currency variability on anticipated revenues and expenses, which fluctuate based on currencies other than the functional currency of the entity. 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. 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. The terms of these contracts are generally less than 18 months. 
 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. 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. 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. The maximum term of these contracts was approximately 7 years. 
 The pre-tax gain (loss) related to the Company's foreign exchange derivative contracts designated as cash flow hedging instruments for the years ended December 31 were as follows: 
 
 Gain (Loss) Recognized in Other Comprehensive Income (Loss) 
 Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Earnings 
 Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) 
 
 2025 2024 2023 2025 2024 2023 
 (in millions) (in millions) 
 Foreign exchange contracts 1 
 $ ( 301 ) $ 161 $ ( 41 ) Net revenue $ ( 45 ) $ 8 $ ( 29 ) 
 General and administrative 2 
 $ ( 343 ) $ 177 $ — 

 1 Includes immaterial amounts excluded from the effectiveness assessment recognized in other comprehensive income (loss). 
 2 Includes immaterial amounts excluded from the effectiveness assessment recognized in earnings. 
 
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 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. For the years ended December 31, 2025, 2024 and 2023 the Company recorded losses of $ 7 million, $ 7 million and $ 6 million, respectively, from accumulated other comprehensive income (loss) to interest expense. 
 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, 2025 that will be reclassified into the consolidated statements of operations within the next 12 months is not material. 
 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. 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. Gains and losses related to the net settlements of interest rate swaps are also recorded in interest expense on the consolidated statements of operations. The periodic cash settlements are included in operating activities on the consolidated statements of cash flows. 
 The Company has an interest rate swap designated as a fair value hedge related to fixed interest rate Senior Notes. In effect, the interest rate swap synthetically converts the fixed interest rate on this debt to a variable interest rate based on the SOFR Overnight Index Swap Rate. The net impact to interest expense for the years ended December 31, 2025, 2024 and 2023 was not material. 
 Net Investment Hedges 
 The Company may use foreign currency denominated debt and/or foreign exchange derivative contracts to hedge a portion of its net investment in foreign subsidiaries against adverse movements in exchange rates. The effective portion of the net investment hedge is recorded as a currency translation adjustment in accumulated other comprehensive income (loss). 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. The amounts recognized in earnings related to forward points for the years ended December 31, 2025, 2024 and 2023 were not material. 
 The pre-tax gain (loss) recognized in other comprehensive income (loss) related to the Company's derivative financial instruments designated as net investment hedging instruments for the years ended December 31 were as follows: 
 
 2025 2024 2023 
 (in millions) 
 Foreign exchange contracts 
 $ 12 $ 43 $ ( 98 ) 

 As of December 31, 2025 and 2024, the Company had € 1.7 billion and € 1.3 billion euro-denominated debt outstanding designated as hedges of a portion of its net investment in its European operations. In December 2024, the Company de-designated € 400 million of the euro-denominated debt as net investment hedges to effectively manage changes in its net investment exposures in foreign subsidiaries. The euro-denominated debt was subsequently re-designated as a net investment hedge effective March 2025. For the years ended December 31, 2025, 2024 and 2023 the Company recorded pre-tax net foreign currency gains (losses) of $( 227 ) million, $ 104 million and $( 67 ) million, respectively, in other comprehensive income (loss). 
 As of December 31, 2025 and 2024, the Company had net foreign currency gains of $ 126 million and $ 295 million, after tax, respectively, in accumulated other comprehensive income (loss) associated with this hedging activity. 
 Non-designated Derivatives 
 The Company may also enter into foreign exchange derivative contracts to serve as economic hedges, such as to offset possible changes in the value of monetary assets and liabilities due to foreign exchange fluctuations, without designating these derivative contracts as hedging instruments. In addition, the Company is subject to foreign exchange risk as part of its daily settlement activities. This risk is typically limited to a few days between when a payment transaction takes place and the subsequent settlement with customers. To manage this risk, the Company may enter into short duration foreign exchange derivative contracts based upon anticipated receipts and disbursements for the respective currency position. 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 
 
 
 
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 functional currencies. Gains and losses resulting from changes in fair value of these contracts are recorded net in general and administrative expenses on the consolidated statements of operations, along with the foreign currency gains and losses on monetary assets and liabilities. 
 The amount of gain recognized on the consolidated statements of operations for non-designated derivative contracts for the years ended December 31 were as follows: 
 
 2025 2024 2023 
 (in millions) 
 Foreign exchange contracts 
 
 General and administrative $ 64 $ 32 $ 42 
 
 

 
 Note 22. Segment Reporting 
 Mastercard has concluded it has one reportable operating segment, “Payment Solutions.” The Payment Solutions segment derives its revenues from a wide range of payments solutions provided to customers. Revenue is generated from providing customers continuous access to Mastercard’s global payments 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. 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. The accounting policies of the Payment Solutions segment are the same as those described in Note 1 (Summary of Significant Accounting Policies). 
 Mastercard’s Chief Executive Officer has been identified as the chief operating decision-maker (“CODM”). 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”). The CODM uses Consolidated Net Income and other measures for internal planning and forecasting purposes and in the calculation of performance-based compensation. 
 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: 
 
 2025 2024 2023 
 (in millions) 
 Net revenue 
 $ 32,791 $ 28,167 $ 25,098 
 Less: 
 
 Personnel 
 7,251 6,673 6,022 
 Professional Fees 
 537 549 495 
 Data processing and telecommunications 
 1,272 1,119 1,008 
 Foreign exchange activity 
 113 65 83 
 Advertising and marketing 
 929 815 825 
 Depreciation and amortization 
 1,143 897 799 
 Provision for litigation 
 504 680 539 
 Investment Income 
 ( 325 ) ( 327 ) ( 274 ) 
 (Gains) losses on equity investments, net 
 88 29 61 
 Interest expense 
 722 646 575 
 Other (income) expense, net 
 ( 166 ) ( 20 ) 7 
 Income tax expense 
 3,610 2,380 2,444 
 Other segment items 1 
 2,145 1,787 1,319 
 Consolidated Net Income 
 $ 14,968 $ 12,874 $ 11,195 

 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. Revenue generated in the U.S. 
 
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 was approximately 29 % of net revenue in 2025, 30 % in 2024 and 30 % in 2023. No individual country, other than the U.S., generated more than 10% of net revenue in those periods. Mastercard did not have any individual customer that generated greater than 10% of net revenue in 2025, 2024 or 2023. 
 The following table reflects the geographical location of the Company’s property, equipment and right-of-use assets, net, as of December 31: 
 
 2025 2024 2023 
 (in millions) 
 United States $ 1,168 $ 1,095 $ 1,027 
 Other countries 1,135 1,043 1,034 
 Total $ 2,303 $ 2,138 $ 2,061 

 
 
 
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 Item 9. Changes in and disagreements with accountants on accounting and financial disclosure 
 Not applicable.
Mastercard Inc 10-K

Item 8. Financial Statements and Supplementary Data
