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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022
Or 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission file number: 001-32877
ma-20220930_g1.jpg
Mastercard Incorporated
(Exact name of registrant as specified in its charter)
Delaware13-4172551
(State or other jurisdiction of incorporation or organization)(IRS Employer Identification Number)
2000 Purchase Street10577
Purchase,NY(Zip Code)
(Address of principal executive offices)
(914) 249-2000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange of which registered
Class A Common Stock, par value $0.0001 per share
MA
New York Stock Exchange
1.1% Notes due 2022
MA22
New York Stock Exchange
2.1% Notes due 2027
MA27
New York Stock Exchange
1.0% Notes due 2029
MA29A
New York Stock Exchange
2.5% Notes due 2030
MA30
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes
No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files)
Yes


No


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check One):
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act)
YesNo
As of October 24, 2022, there were 953,803,041 shares outstanding of the registrant’s Class A common stock, par value $0.0001 per share; and 7,656,734 shares outstanding of the registrant’s Class B common stock, par value $0.0001 per share.



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MASTERCARD INCORPORATED FORM 10-Q
TABLE OF CONTENTS

2 MASTERCARD SEPTEMBER 30, 2022 FORM 10-Q


In this Report on Form 10-Q (“Report”), references to the “Company,” “Mastercard,” “we,” “us” or “our” refer to the business conducted by Mastercard Incorporated and its consolidated subsidiaries, including our operating subsidiary, Mastercard International Incorporated, and to the Mastercard brand.
Forward-Looking Statements
This Report contains forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts may be forward-looking statements. When used in this Report, the words “believe”, “expect”, “could”, “may”, “would”, “will”, “trend” and similar words are intended to identify forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements that relate to the Company’s future prospects, developments and business strategies.
Many factors and uncertainties relating to our operations and business environment, all of which are difficult to predict and many of which are outside of our control, influence whether any forward-looking statements can or will be achieved. Any one of those factors could cause our actual results to differ materially from those expressed or implied in writing in any forward-looking statements made by Mastercard or on its behalf, including, but not limited to, the following factors:
regulation directly related to the payments industry (including regulatory, legislative and litigation activity with respect to interchange rates and surcharging)
the impact of preferential or protective government actions
regulation of privacy, data, security and the digital economy
regulation that directly or indirectly applies to us based on our participation in the global payments industry (including anti-money laundering, counter financing of terrorism, economic sanctions and anti-corruption, account-based payments systems, and issuer and acquirer practice regulation)
the impact of changes in tax laws, as well as regulations and interpretations of such laws or challenges to our tax positions
potential or incurred liability and limitations on business related to any litigation or litigation settlements
the impact of the global COVID-19 pandemic and measures taken in response
the impact of competition in the global payments industry (including disintermediation and pricing pressure)
the challenges relating to rapid technological developments and changes
the challenges relating to operating a real-time account-based payments system and to working with new customers and end users
the impact of information security incidents, account data breaches or service disruptions
issues related to our relationships with our stakeholders (including loss of substantial business from significant customers, competitor relationships with our customers, consolidation amongst our customers, merchants’ continued focus on acceptance costs and unique risks from our work with governments)
exposure to loss or illiquidity due to our role as guarantor and other contractual obligations
the impact of global economic, political, financial and societal events and conditions, including adverse currency fluctuations and foreign exchange controls
events and resulting actions related to the Russian invasion of Ukraine
reputational impact, including impact related to brand perception and lack of visibility of our brands in products and services
the inability to attract, hire and retain a highly qualified and diverse workforce, or maintain our corporate culture
issues related to acquisition integration, strategic investments and entry into new businesses
issues related to our Class A common stock and corporate governance structure
Please see a complete discussion of these risk factors in Part I, Item 1A - Risk Factors of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 and in Part II, Item 1A - Risk Factors of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022. We caution you that the important factors referenced above may not contain all of the factors that are important to you. Our forward-looking statements speak only as of the date of this Report or as of the date they are made, and we undertake no obligation to update our forward-looking statements.

MASTERCARD SEPTEMBER 30, 2022 FORM 10-Q 3





PART I
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Item 1. Consolidated financial statements (unaudited)
Mastercard Incorporated
Index to consolidated financial statements (unaudited)
Page
Consolidated Statement of Operations — Three and Nine Months Ended September 30, 2022 and 2021
Consolidated Statement of Comprehensive Income — Three and Nine Months Ended September 30, 2022 and 2021
Consolidated Balance Sheet — September 30, 2022 and December 31, 2021
Consolidated Statement of Changes in Equity Three and Nine Months Ended September 30, 2022 and 2021
Consolidated Statement of Cash Flows — Nine Months Ended September 30, 2022 and 2021

MASTERCARD SEPTEMBER 30, 2022 FORM 10-Q 5


PART I
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Statement of Operations (Unaudited)
 Three Months Ended September 30,Nine Months Ended September 30,
 2022202120222021
 (in millions, except per share data)
Net Revenue$5,756 $4,985 $16,420 $13,668 
Operating Expenses:
General and administrative2,069 1,831 5,860 5,225 
Advertising and marketing182 222 573 557 
Depreciation and amortization185 188 566 537 
Provision for litigation208 27 341 94 
Total operating expenses2,644 2,268 7,340 6,413 
Operating income3,112 2,717 9,080 7,255 
Other Income (Expense):
Investment income16 5 28 9 
Gains (losses) on equity investments, net60 197 (133)534 
Interest expense(120)(110)(344)(323)
Other income (expense), net4 7 12 9 
Total other income (expense)(40)99 (437)229 
Income before income taxes3,072 2,816 8,643 7,484 
Income tax expense573 402 1,238 1,176 
Net Income$2,499 $2,414 $7,405 $6,308 
Basic Earnings per Share$2.59 $2.45 $7.63 $6.37 
Basic weighted-average shares outstanding965 986 971 990 
Diluted Earnings per Share$2.58 $2.44 $7.60 $6.35 
Diluted weighted-average shares outstanding968 990 974 994 

The accompanying notes are an integral part of these consolidated financial statements.

6 MASTERCARD SEPTEMBER 30, 2022 FORM 10-Q


PART I
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Statement of Comprehensive Income (Unaudited)
 Three Months Ended September 30,Nine Months Ended September 30,
 2022202120222021
 (in millions)
Net Income$2,499 $2,414 $7,405 $6,308 
Other comprehensive income (loss):
Foreign currency translation adjustments(743)(219)(1,517)(274)
Income tax effect62 9 105 33 
Foreign currency translation adjustments, net of income tax effect(681)(210)(1,412)(241)
Translation adjustments on net investment hedges372 90 772 162 
Income tax effect(82)(20)(171)(36)
Translation adjustments on net investment hedges, net of income tax effect290 70 601 126 
Cash flow hedges14 2 21 1 
Income tax effect(3) (5) 
Reclassification adjustments for cash flow hedges(4)1 (9)5 
Income tax effect1  2 (1)
Cash flow hedges, net of income tax effect8 3 9 5 
Reclassification adjustments for defined benefit pension and other postretirement plans  (1)(1)
Income tax effect    
Defined benefit pension and other postretirement plans, net of income tax effect  (1)(1)
Investment securities available-for-sale
(2)(2)(6) 
Income tax effect 1 1  
Investment securities available-for-sale, net of income tax effect(2)(1)(5) 
Other comprehensive income (loss), net of tax(385)(138)(808)(111)
Comprehensive Income$2,114 $2,276 $6,597 $6,197 

The accompanying notes are an integral part of these consolidated financial statements.


MASTERCARD SEPTEMBER 30, 2022 FORM 10-Q 7


PART I
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Balance Sheet (Unaudited)
September 30, 2022December 31, 2021
 (in millions, except per share data)
Assets
Current assets:
Cash and cash equivalents$7,633 $7,421 
Restricted cash for litigation settlement586 586 
Investments412 473 
Accounts receivable3,167 3,006 
Settlement assets1,019 1,319 
Restricted security deposits held for customers1,531 1,873 
Prepaid expenses and other current assets2,475 2,271 
Total current assets16,823 16,949 
Property, equipment and right-of-use assets, net of accumulated depreciation and amortization
of $1,788 and $1,614, respectively
1,951 1,907 
Deferred income taxes1,069 486 
Goodwill7,176 7,662 
Other intangible assets, net of accumulated amortization of $1,834 and $1,755, respectively
3,582 3,671 
Other assets7,011 6,994 
Total Assets$37,612 $37,669 
Liabilities, Redeemable Non-controlling Interests and Equity
Current liabilities:
Accounts payable$615 $738 
Settlement obligations1,054 913 
Restricted security deposits held for customers1,531 1,873 
Accrued litigation1,086 840 
Accrued expenses6,888 6,642 
Short-term debt957 792 
Other current liabilities1,345 1,364 
Total current liabilities13,476 13,162 
Long-term debt13,577 13,109 
Deferred income taxes346 395 
Other liabilities3,770 3,591 
Total Liabilities31,169 30,257 
Commitments and Contingencies
Redeemable Non-controlling Interests20 29 
Stockholders’ Equity
Class A common stock, $0.0001 par value; authorized 3,000 shares, 1,399 and 1,397 shares issued and 955 and 972 shares outstanding, respectively
  
Class B common stock, $0.0001 par value; authorized 1,200 shares, 8 shares issued and outstanding
  
Additional paid-in-capital5,269 5,061 
Class A treasury stock, at cost, 444 and 425 shares, respectively
(48,916)(42,588)
Retained earnings51,625 45,648 
Accumulated other comprehensive income (loss)(1,617)(809)
Mastercard Incorporated Stockholders' Equity6,361 7,312 
Non-controlling interests62 71 
Total Equity6,423 7,383 
Total Liabilities, Redeemable Non-controlling Interests and Equity$37,612 $37,669 

The accompanying notes are an integral part of these consolidated financial statements.

8 MASTERCARD SEPTEMBER 30, 2022 FORM 10-Q


PART I
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Statement of Changes in Equity (Unaudited)
Three Months Ended September 30, 2022
Stockholders’ Equity
Common StockAdditional
Paid-In
Capital
Class A
Treasury
Stock
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Mastercard Incorporated Stockholders’ EquityNon-
Controlling
Interests
Total Equity
Class AClass B
(in millions)
Balance at June 30, 2022$ $ $5,163 $(47,359)$49,599 $(1,232)$6,171 $65 $6,236 
Net income— — — — 2,499 — 2,499 — 2,499 
Activity related to non-controlling interests— — — — — — — (3)(3)
Redeemable non-controlling interest adjustments— — — — (1)— (1)— (1)
Other comprehensive income (loss)— — — — — (385)(385)— (385)
Dividends— — — — (472)— (472)— (472)
Purchases of treasury stock— — — (1,557)— — (1,557)— (1,557)
Share-based payments— — 106 — — — 106 — 106 
Balance at September 30, 2022$ $ $5,269 $(48,916)$51,625 $(1,617)$6,361 $62 $6,423 

Nine Months Ended September 30, 2022
Stockholders’ Equity
  
Common Stock
Additional
Paid-In
Capital
Class A
Treasury
Stock
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Mastercard Incorporated Stockholders' EquityNon-
Controlling
Interests
Total
Equity
 Class AClass B
 (in millions)
Balance at December 31, 2021$ $ $5,061 $(42,588)$45,648 $(809)$7,312 $71 $7,383 
Net income— — — — 7,405 — 7,405 — 7,405 
Activity related to non-controlling interests— — — — — — — (9)(9)
Redeemable non-controlling interest adjustments — — — — (5)— (5)— (5)
Other comprehensive income (loss)— — — — — (808)(808)— (808)
Dividends— — — — (1,423)— (1,423)— (1,423)
Purchases of treasury stock— — — (6,333)— — (6,333)— (6,333)
Share-based payments— — 208 5 — — 213 — 213 
Balance at September 30, 2022$ $ $5,269 $(48,916)$51,625 $(1,617)$6,361 $62 $6,423 

MASTERCARD SEPTEMBER 30, 2022 FORM 10-Q 9


PART I
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Statement of Changes in Equity (Unaudited) - (Continued)
Three Months Ended September 30, 2021
Stockholders’ Equity
Common StockAdditional
Paid-In
Capital
Class A
Treasury
Stock
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Mastercard Incorporated Stockholders’ EquityNon-
Controlling
Interests
Total Equity
Class AClass B
(in millions)
Balance at June 30, 2021$ $ $5,053 $(39,729)$41,771 $(653)$6,442 $98 $6,540 
Net income— — — — 2,414 — 2,414 — 2,414 
Activity related to non-controlling interests— — — — — — — (11)(11)
Acquisition of non-controlling interest— — (122)— — — (122)(17)(139)
Redeemable non-controlling interest adjustments— — — — (2)— (2)— (2)
Other comprehensive income (loss)— — — — — (138)(138)— (138)
Dividends— — — — (433)— (433)(433)
Purchases of treasury stock— — — (1,553)— — (1,553)— (1,553)
Share-based payments— — 95 — — — 95 — 95 
Balance at September 30, 2021$ $ $5,026 $(41,282)$43,750 $(791)$6,703 $70 $6,773 

Nine Months Ended September 30, 2021
Stockholders’ Equity
  
Common Stock
Additional
Paid-In
Capital
Class A
Treasury
Stock
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Mastercard Incorporated Stockholders' EquityNon-
Controlling
Interests
Total
Equity
 Class AClass B
 (in millions)
Balance at December 31, 2020$ $ $4,982 $(36,658)$38,747 $(680)$6,391 $97 $6,488 
Net income— — — — 6,308 — 6,308 — 6,308 
Activity related to non-controlling interests— — — — — — — (10)(10)
Acquisition of non-controlling interest— — (122)— — — (122)(17)(139)
Redeemable non-controlling interest adjustments— — — — (4)— (4)— (4)
Other comprehensive income (loss)— — — — — (111)(111)— (111)
Dividends— — — — (1,301)— (1,301)— (1,301)
Purchases of treasury stock— — — (4,628)— — (4,628)— (4,628)
Share-based payments— — 166 4 — — 170 — 170 
Balance at September 30, 2021$ $ $5,026 $(41,282)$43,750 $(791)$6,703 $70 $6,773 

The accompanying notes are an integral part of these consolidated financial statements.

10 MASTERCARD SEPTEMBER 30, 2022 FORM 10-Q


PART I
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Statement of Cash Flows (Unaudited)
 Nine Months Ended September 30,
 20222021
 (in millions)
Operating Activities
Net income$7,405 $6,308 
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of customer and merchant incentives1,197 995 
Depreciation and amortization566 537 
(Gains) losses on equity investments, net133 (534)
Share-based compensation273 241 
Deferred income taxes(589)(49)
Other40 34 
Changes in operating assets and liabilities:
Accounts receivable(326)(234)
Settlement assets298 845 
Prepaid expenses(1,472)(1,742)
Accrued litigation and legal settlements249 (4)
Restricted security deposits held for customers(342)136 
Accounts payable(91)(74)
Settlement obligations146 (978)
Accrued expenses638 692 
Net change in other assets and liabilities(30)101 
Net cash provided by operating activities8,095 6,274 
Investing Activities
Purchases of investment securities available-for-sale(192)(344)
Purchases of investments held-to-maturity(174)(214)
Proceeds from sales of investment securities available-for-sale28 66 
Proceeds from maturities of investment securities available-for-sale156 249 
Proceeds from maturities of investments held-to-maturity194 198 
Purchases of property and equipment(312)(285)
Capitalized software(446)(301)
Purchases of equity investments(62)(179)
Proceeds from sales of equity investments7 185 
Acquisition of businesses, net of cash acquired(313)(4,197)
Other investing activities(6)(12)
Net cash used in investing activities(1,120)(4,834)
Financing Activities
Purchases of treasury stock(6,339)(4,628)
Dividends paid(1,430)(1,307)
Proceeds from debt, net1,127 1,282 
Acquisition of non-controlling interest (133)
Contingent consideration paid (64)
Tax withholdings related to share-based payments(137)(130)
Cash proceeds from exercise of stock options77 55 
Other financing activities(12)(13)
Net cash used in financing activities(6,714)(4,938)
Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents(387)(80)
Net decrease in cash, cash equivalents, restricted cash and restricted cash equivalents(126)(3,578)
Cash, cash equivalents, restricted cash and restricted cash equivalents - beginning of period9,902 12,419 
Cash, cash equivalents, restricted cash and restricted cash equivalents - end of period$9,776 $8,841 

The accompanying notes are an integral part of these consolidated financial statements.

MASTERCARD SEPTEMBER 30, 2022 FORM 10-Q 11


PART I
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Notes to consolidated financial statements (unaudited)
Note 1. Summary of Significant Accounting Policies
Organization
Mastercard Incorporated and its consolidated subsidiaries, including Mastercard International Incorporated (“Mastercard International” and together with Mastercard Incorporated, “Mastercard” or the “Company”), is a technology company in the global payments industry that connects consumers, financial institutions, merchants, governments, digital partners, businesses and other organizations worldwide, enabling them to use electronic forms of payment instead of cash and checks.
Consolidation and Basis of Presentation
The consolidated financial statements include the accounts of Mastercard and its majority-owned and controlled entities, including any variable interest entities (“VIEs”) for which the Company is the primary beneficiary. Investments in VIEs for which the Company is not considered the primary beneficiary are not consolidated and are accounted for as marketable equity method or measurement alternative method investments and recorded in other assets on the consolidated balance sheet. At September 30, 2022 and December 31, 2021, there were no significant VIEs which required consolidation and the investments were not considered material to the consolidated financial statements. The Company consolidates acquisitions as of the date on which the Company has obtained a controlling financial interest. Intercompany transactions and balances have been eliminated in consolidation. The Company corrected prior period classifications of certain line items within investing activities on the consolidated statement of cash flows with no impact on total net cash used in investing activities. The Company follows accounting principles generally accepted in the United States of America (“GAAP”).
The balance sheet as of December 31, 2021 was derived from the audited consolidated financial statements as of December 31, 2021. The consolidated financial statements for the three and nine months ended September 30, 2022 and 2021 and as of September 30, 2022 are unaudited, and in the opinion of management, include all normal recurring adjustments that are necessary to present fairly the results for interim periods. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the full year.
The accompanying unaudited consolidated financial statements are presented in accordance with the U.S. Securities and Exchange Commission (“SEC”) requirements for Quarterly Reports on Form 10-Q. Reference should be made to Mastercard’s Annual Report on Form 10-K for the year ended December 31, 2021 for additional disclosures, including a summary of the Company’s significant accounting policies.
Key Developments
Beginning in February 2022, in response to the Russian invasion of Ukraine, the United States, the European Union and other governments imposed sanctions and other restrictive measures on certain Russian-related entities and individuals and, in March 2022, the Company suspended business operations in Russia. For the three months ended September 30, 2022, there were no charges directly related to these actions. For the nine months ended September 30, 2022, the Company recorded net charges directly related to these actions of $30 million ($24 million after tax).
Note 2. Acquisitions
In April 2022, Mastercard acquired 100% equity interest in Dynamic Yield LTD. Total cash consideration for the acquisition was $325 million. The Company is evaluating and finalizing the purchase price accounting for this acquisition. The Company’s preliminary estimate of net assets acquired has been recorded primarily as intangible assets, including goodwill of $200 million that is primarily attributable to the synergies expected to arise after the acquisition date, and other intangible assets related to developed technologies of $100 million and customer relationships of $25 million. None of the goodwill is expected to be deductible for local tax purposes. Refer to Note 1 (Summary of Significant Accounting Policies) to the consolidated financial statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, for the valuation techniques Mastercard utilizes to fair value the respective components of business combinations.
In 2021, the Company acquired several businesses in separate transactions for total consideration of $4.7 billion. As of September 30, 2022, the Company had finalized the purchase accounting for $4.4 billion of these businesses acquired and is evaluating and finalizing the purchase accounting for the remainder of businesses acquired during 2021. For the preliminary estimated and final fair values of the purchase price allocations, as of the acquisition dates, refer to Note 2 (Acquisitions) to the consolidated financial statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

12 MASTERCARD SEPTEMBER 30, 2022 FORM 10-Q


PART I
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 3. Revenue
The Company’s disaggregated net revenue by source and geographic region were as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(in millions)
Revenue by source:
Domestic assessments$2,252 $2,139 $6,669 $5,993 
Cross-border volume fees1,803 1,276 4,813 3,284 
Transaction processing3,288 2,849 9,261 7,812 
Other revenues1,824 1,562 5,153 4,384 
Gross revenue9,167 7,826 25,896 21,473 
Rebates and incentives (contra-revenue)(3,411)(2,841)(9,476)(7,805)
Net revenue$5,756 $4,985 $16,420 $13,668 
Net revenue by geographic region:
North American Markets$1,995 $1,707 $5,677