Mastercard Inc

Previous wording

Key highlights for the three months ended March 31, 2024, versus the comparable period in 2023:

Current wording

Key highlights for the three and six months ended June 30, 2024, versus the comparable periods in 2023:

Previous wording

Other financial highlights for the three months ended March 31, 2024 were as follows:

Current wording

Other financial highlights for the six months ended June 30, 2024 were as follows:

Previous wording

•We generated net cash flows from operations of $1.7 billion.

Current wording

•We generated net cash flows from operations of $4.8 billion.

Previous wording

•We repurchased 4.4 million shares of our common stock for $2.0 billion and paid dividends of $0.6 billion.

Current wording

•We repurchased 10.2 million shares of our common stock for $4.6 billion and paid dividends of $1.2 billion.

Previous wording

•In thethree months ended March 31, 2024 and 2023, we recorded net gains of $6 million ($5 million after tax, or $0.01 per diluted share) and net losses of $212 million ($176 million after tax, or $0.18 per diluted share), respectively, primarily related to unrealized fair market value adjustments on marketable and nonmarketable equity securities.

Current wording

•In the three and six months ended June 30, 2023, we recorded net gains of $123 million ($118 million after tax, or $0.12 per diluted share) and net losses of $89 million ($58 million after tax, or $0.06 per diluted share), respectively, primarily related to unrealized fair market value adjustments on marketable and nonmarketable equity securities.

Previous wording

•In the three months ended March 31, 2024, we recorded charges of $126 million ($87 million after tax, or $0.09 per diluted share), primarily due to a legal provision associated with the ATM non-discrimination rule surcharge complaints.

Current wording

•In the three months ended June 30, 2024, we recorded charges of $98 million ($73 million after tax, or $0.08 per diluted share), primarily as a result of settlements with a number of U.K. merchants. In the six months ended June 30, 2024, we recorded charges of $224 million ($160 million after tax, or $0.17 per diluted share), primarily as a result of settlements with a number of U.K. merchants and a legal provision associated with the ATM non-discrimination rule surcharge complaints.

Previous wording

•In thethree months ended March 31, 2023, we recorded charges of $211 million ($140 million after tax, or $0.15 per diluted share) as a result of a change in estimate related to the claims of merchants who opted out of the U.S. merchant class litigation.

Current wording

•In the three months ended June 30, 2023, we recorded charges of $20 million ($15 million after tax, or $0.02 per diluted share) as a result of settlements with a number of U.K. and Pan-European merchants. In the six months ended June 30, 2023, we recorded charges of $231 million ($156 million after tax, or $0.16 per diluted share) primarily as a result of a change in estimate related to the claims of merchants who opted out of the U.S. merchant class litigation.

Previous wording

Currency-neutral growth rates are calculated by remeasuring the prior period’s results using the current period’s exchange rates for both the translational and transactional impacts on operating results and are non-GAAP financial measures. The impact of currency translation represents the effect of translating operating results where the functional currency is different from our U.S. dollar reporting currency. The impact of the transactional currency represents the effect of converting revenue and expenses occurring in a currency other than the functional currency of the entity. The impact of the related realized gains and losses resulting from our foreign exchange derivative contracts designated as cash flow hedging instruments is recognized in the respective financial statement line item on the statement of operations when the underlying forecasted transactions impact earnings. We believe the presentation of currency-neutral growth rates provides relevant information to facilitate an understanding of our operating results.

Current wording

Currency-neutral growth rates are calculated by remeasuring the prior period’s results using the current period’s exchange rates for both the translational and transactional impacts on operating results and are non-GAAP financial measures. The impact of currency translation represents the effect of translating operating results where the functional currency is different from our U.S. dollar reporting currency. The impact of the transactional currency represents the effect of converting revenue and expenses occurring in a currency other than the functional currency of the entity. The impact of the related realized gains and losses resulting from our foreign exchange derivative contracts designated as cash flow hedging instruments (specifically those that manage the impact of foreign currency variability on anticipated revenues and expenses) is recognized in the respective financial statement line item on the statement of operations when the underlying forecasted transactions impact earnings.

Previous wording

The translational and transactional impact of currency and the related impact of our foreign exchange derivative contracts designated as cash flow hedging instruments (“Currency impact”) has been excluded from our currency-neutral growth rates and has been identified in the non-GAAP information below and our “Drivers of Change” tables. See “Foreign Currency - Currency Impact” for further information on our currency impacts and “Financial Results - Net Revenue” and “Financial Results - Operating Expenses” for our "Drivers of Change” tables.

Current wording

The translational and transactional impact of currency and the related impact of our foreign exchange derivative contracts designated as cash flow hedging instruments as specified in the preceding paragraph (collectively the “Currency Impact”) has been excluded from our currency-neutral growth rates and has been identified in the “Non-GAAP Reconciliations” tables below and our “Drivers of Change” tables. See “Foreign Currency - Currency Impact” for further information on our currency impacts and “Financial Results - Net Revenue” and “Financial Results - Operating Expenses” for our "Drivers of Change” tables.

Previous wording

The following table represents the reconciliation of our growth rates reported under GAAP to our non-GAAP growth rates:

Current wording

The following tables represent the reconciliation of our growth rates reported under GAAP to our non-GAAP growth rates:

Previous wording

Our operating results are also impacted by transactional currency. The impact of the transactional currency represents the effect of converting revenue and expense transactions occurring in a currency other than the functional currency. Changes in currency exchange rates directly impact the calculation of gross dollar volume (“GDV”), which is used in the calculation of our key metrics related to domestic assessments and cross-border assessments as well as certain volume-related rebates and incentives. GDV is calculated based on local currency spending volume converted to U.S. dollars and euros using average exchange rates for the period. As a result, our key metrics related to domestic assessments and cross-border assessments as well as certain volume-related rebates and incentives are impacted by the strengthening or weakening of the U.S. dollar and euro versus local currencies. For example, our billing in Australia is in the U.S. dollar, however, consumer spend in Australia is in the Australian dollar. The transactional currency impact of converting Australian dollars to our U.S. dollar billing currency will have an impact on the revenue generated. The strengthening or weakening of the U.S. dollar is evident when GDV growth on a U.S. dollar-converted basis is compared to GDV growth on a local currency basis. For the three months ended March 31, 2024, GDV on a U.S. dollar-converted basis increased 9% while GDV on a local currency basis increased 10% versus the comparable periods in 2023. Further, the impact from transactional currency occurs in our key metric related to transaction processing assessments and other network assessments as well as value-added services and solutions revenue and operating expenses when the transacting currency of these items is different than the functional currency of the entity.

Current wording

Our operating results are also impacted by transactional currency. The impact of the transactional currency represents the effect of converting revenue and expense transactions occurring in a currency other than the functional currency. Changes in currency exchange rates directly impact the calculation of gross dollar volume (“GDV”), which is used in the calculation of our key metrics related to domestic assessments and cross-border assessments as well as certain volume-related rebates and incentives. GDV is calculated based on local currency spending volume converted to U.S. dollars and euros using average exchange rates for the period. As a result, our key metrics related to domestic assessments and cross-border assessments as well as certain volume-related rebates and incentives are impacted by the strengthening or weakening of the U.S. dollar and euro versus local currencies. For example, our billing in Australia is in the U.S. dollar, however, consumer spend in Australia is in the Australian dollar. The transactional currency impact of converting Australian dollars to our U.S. dollar billing currency will have an impact on the revenue generated. The strengthening or weakening of the U.S. dollar is evident when GDV growth on a U.S. dollar-converted basis is compared to GDV growth on a local currency basis. For the three and six months ended June 30, 2024, GDV on a U.S. dollar-converted basis increased 6% and 7%, respectively, while GDV on a local currency basis increased 9% and 10%, respectively, versus the comparable periods in 2023. Further, the impact from transactional currency occurs in our key metrics related to transaction processing assessments and other network assessments as well as value-added services and solutions revenue and operating expenses when the transacting currency of these items is different than the functional currency of the entity.

Previous wording

For the three months ended March 31, 2024, net revenue increased 10%, or 11% on a currency-neutral basis, versus the comparable period in 2023. The increase in net revenue was attributable to both our payment network and value-added services and solutions.

Current wording

For the three months ended June 30, 2024, net revenue increased 11%, or 13% on a currency-neutral basis, versus the comparable period in 2023. The increase in net revenue was attributable to both our payment network and value-added services and solutions.

Previous wording

Net revenue from our payment network increased 7%, or 8% on a currency-neutral basis, versus the comparable period in 2023. Theincrease was primarily driven by growth in domestic and cross-border dollar volumes and an increase in the number of switched transactions, reflecting trends of growth in our key drivers. Net revenue from our payment network included $4,100 million of rebates and incentives provided to customers, which increased 20%, on both an as reported and currency-neutral basis, versus the comparable period in 2023, primarily due to an increase in our key drivers as well as new and renewed deals.

Current wording

Net revenue from our payment network increased 7%, or 9% on a currency-neutral basis, versus the comparable period in 2023. The increase was primarily driven by growth in domestic and cross-border dollar volumes and an increase in the number of switched transactions, reflecting trends of growth in our key drivers. Net revenue from our payment network included $4,222 million of rebates and incentives provided to customers, which increased 14%, or 16% on a currency-neutral basis, versus the comparable period in 2023, primarily due to an increase in our key drivers as well as new and renewed deals.

Previous wording

Net revenue from our value-added services and solutions increased 16%, or 15% on a currency-neutral basis, versus the comparable period in 2023. The increase was driven primarily by growth in (i) our underlying key drivers, (ii) our consulting and marketing services, loyalty solutions and fraud and security capabilities and (iii) other solutions.

Current wording

Net revenue from our value-added services and solutions increased 18%, or 19% on a currency-neutral basis, versus the comparable period in 2023. The increase was driven primarily by (1) growth in our underlying key drivers and (2) our consulting, data analytics and marketing services, and fraud and security and identity and authentication solutions.

Previous wording

For the three months ended March 31, 2024, operating expenses increased 5% versus the comparable period in 2023. Adjusted operating expenses increased 9%, on both an as adjusted and currency-neutral basis, versus the comparable period in 2023.

Current wording

For the six months ended June 30, 2024, operating expenses increased 8% versus the comparable period in 2023. Adjusted operating expenses increased 9%, on both an as adjusted and currency-neutral basis, versus the comparable period in 2023.

Previous wording

The following table summarizes the drivers of changes in operating expenses:

Current wording

The following table summarizes the drivers of change in operating expenses:

Previous wording

For the three months ended March 31, 2024, general and administrative expenses increased 12% on both an as reported and currency-neutral basis, versus the comparable period in 2023. The increase was due to higher personnel and data processing costs to support the continued investment in our strategic initiatives across payments, services and new network capabilities.

Current wording

For the three months ended June 30, 2024, general and administrative expenses increased 10%, or 11% on a currency-neutral basis, versus the comparable period in 2023. For the six months ended June 30, 2024, general and administrative expenses increased 11%, on both an as reported and currency-neutral basis, versus the comparable period in 2023. The increase for both the three and six months ended June 30, 2024 was due to higher personnel and data processing costs to support the continued investment in our strategic initiatives across payments and value-added services and solutions.

Previous wording

For the three months ended March 31, 2024, advertising and marketing expenses decreased 31% on both an as reported and a currency-neutral basis, versus the comparable period in 2023, primarily due to timing of spending on sponsorships.

Current wording

For the three months ended June 30, 2024, advertising and marketing expenses decreased 8%, or 7% on a currency-neutral basis, versus the comparable period in 2023, primarily due to timing of marketing campaigns.

Previous wording

For the three months ended March 31, 2024, depreciation and amortization expenses increased 13%, or 12% on a currency-neutral basis, versus the comparable period in 2023, primarily due to increased software capitalization driven by the continued growth of our business.

Current wording

For the three months ended June 30, 2024, depreciation and amortization expenses increased 17%, on both an as reported and currency-neutral basis, versus the comparable period in 2023. For the six months ended June 30, 2024, depreciation and amortization expenses increased 15%, or 14% on a currency-neutral basis, versus the comparable period in 2023. The increase for both the three and six months ended June 30, 2024 was primarily due to increased software capitalization driven by the continued growth of our business.

Previous wording

For the three months ended March 31, 2024, we recorded $126 million, primarily due to a legal provision associated with the ATM non-discrimination rule surcharge complaints. See “Non-GAAP Financial Information” in this section and Note 13 (Legal and Regulatory Proceedings) to the consolidated financial statements included in Part I, Item 1 of this Report for further discussion.

Current wording

For the three months ended June 30, 2024, we recorded charges of $98 million, primarily as a result of settlements with a number of U.K. merchants. For the six months ended June 30, 2024, we recorded charges of $224 million, primarily as a result of settlements with a number of U.K. merchants and a legal provision associated with the ATM non-discrimination rule surcharge complaints. See “Non-GAAP Financial Information” in this section and Note 14 (Legal and Regulatory Proceedings) to the consolidated financial statements included in Part I, Item 1 of this Report for further discussion.

Previous wording

The components of other income (expense) were as follows:

Current wording

The components of total other income (expense) were as follows:

Previous wording

The effective income tax rates were 15.4% and 17.2% for the three months ended March 31, 2024 and 2023, respectively. The adjusted effective income tax rates were 15.9% and 18.3% for the three months ended March 31, 2024 and 2023, respectively. Both the as reported and as adjusted effective income tax rates were lower versus the comparable period in 2023, primarily due to a change in our geographic mix of earnings as well as discrete tax benefits related to share-based payments.

Current wording

The effective income tax rates were 17.3% and 23.2% for the three months ended June 30, 2024 and 2023, respectively. The adjusted effective income tax rates were 17.5% and 23.9% for the three months ended June 30, 2024 and 2023, respectively. The effective income tax rates were 16.4% and 20.6% for the six months ended June 30, 2024 and 2023, respectively. The adjusted effective income tax rates were 16.7% and 21.2% for the six months ended June 30, 2024 and 2023, respectively. Both the as-reported and as-adjusted effective income tax rates for the three and six months ended June 30, 2024 were lower versus the comparable periods in 2023, primarily due to a $212 million discrete tax expense in the second quarter of 2023 to establish a valuation allowance associated with the U.S. foreign tax credit carryforward deferred tax asset resulting from foreign tax legislation enacted in Brazil in 2023. A change in our geographic mix of earnings also contributed to the lower effective income tax rates for the current periods.

Previous wording

The Organization for Economic Co-operation and Development (“OECD”) Pillar 2 guidelines published to date include transition and safe harbor rules around the implementation of the Pillar 2 global minimum tax of 15%. Based on current enacted legislation effective in 2024 and our structure, we do not expect a material impact in 2024. We are monitoring developments and evaluating the impacts these new rules will have on our future effective income tax rate, tax payments, financial condition and results of operations.

Current wording

The Organization for Economic Co-operation and Development (“OECD”) Pillar 2 guidelines published to date include transition and safe harbor rules around the implementation of the Pillar 2 global minimum tax of 15%. Based on current enacted legislation effective in 2024 and our structure, we do not expect a material impact in 2024. We are monitoring developments and evaluating the impacts these new rules may have on our future effective income tax rate, tax payments, financial condition and results of operations.

Previous wording

1 Investments include available-for-sale securities and held-to-maturity securities. This amount excludes restricted cash and restricted cash equivalents of $1.9 billion and $1.9 billion at March 31, 2024 and December 31, 2023, respectively.

Current wording

1 Investments include available-for-sale securities and held-to-maturity securities. This amount excludes restricted cash and restricted cash equivalents of $1.8 billion and $1.9 billion at June 30, 2024 and December 31, 2023, respectively.

Previous wording

Net cash provided by operating activities decreased $247 million for the three months ended March 31, 2024, versus the comparable period in 2023, primarily due to higher net income after adjusting for non-cash items, more than offset by higher customer incentive payments.

Current wording

Net cash provided by operating activities increased $193 million for the six months ended June 30, 2024, versus the comparable period in 2023, primarily due to higher net income after adjusting for non-cash items, partially offset by higher customer incentive payments.

Previous wording

Net cash used in investing activities decreased $223 million for the three months ended March 31, 2024, versus the comparable period in 2023, primarily due to higher proceeds from the maturities of investments in time deposits.

Current wording

Net cash used in investing activities decreased $147 million for the six months ended June 30, 2024, versus the comparable period in 2023, primarily due to higher proceeds from maturities of investment securities, partially offset by purchases of investment securities.

Previous wording

Net cash used in financing activities increased $726 million for the three months ended March 31, 2024, versus the comparable period in 2023, primarily due to no cash proceeds received from debt issuances in the current period versus the comparable period, partially offset by less cash paid for repurchases of our Class A common stock.

Current wording

Net cash used in financing activities increased $1,204 million for the six months ended June 30, 2024, versus the comparable period in 2023, primarily due to the repayment of the 2014 USD Notes and lower cash proceeds received from debt issuances in the current period versus the comparable period, partially offset by less cash paid for repurchases of our Class A common stock.

Previous wording

Our total debt outstanding was $15.6 billion and $15.7 billion at March 31, 2024 and December 31, 2023, respectively, with the earliest maturity of $1.0 billion of principal occurring in April 2024.

Current wording

In April 2024, $1 billion of principal related to the 2014 USD Notes matured and was paid. In May 2024, we issued $1 billion principal amount of notes due May 2034 (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 $983 million. Our total debt outstanding was $15.6 billion and $15.7 billion at June 30, 2024 and December 31, 2023, respectively, with the earliest maturity of INR28.1 billion ($337 million as of June 30, 2024) of principal that occurred in July 2024.

Previous wording

See Note 15 (Debt) to the consolidated financial statements included in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2023 for further discussion on our debt, the Commercial Paper Program and the Credit Facility.

Current wording

See Note 9 (Debt) to the consolidated financial statements included in Part I, Item 1 for further discussion on our debt and Note 15 (Debt) to the consolidated financial statements included in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2023 for further discussion on our debt, the Commercial Paper Program and the Credit Facility.

Previous wording

Aggregate payments for quarterly dividends totaled $616 million for the three months ended March 31, 2024.

Current wording

Aggregate payments for quarterly dividends totaled $1,231 million for the six months ended June 30, 2024.

Previous wording

On February 6, 2024, our Board of Directors declared a quarterly cash dividend of $0.66 per share payable on May 9, 2024 to holders of record on April 9, 2024 of our Class A common stock and Class B common stock. The aggregate amount of this dividend is estimated to be $615 million.

Current wording

On June 18, 2024, our Board of Directors declared a quarterly cash dividend of $0.66 per share payable on August 9, 2024 to holders of record on July 9, 2024 of our Class A common stock and Class B common stock. The aggregate amount of this dividend is $611 million.

Previous wording

Repurchased shares of our common stock are considered treasury stock. In December 2023 and 2022, our Board of Directors approved share repurchase programs of our Class A common stock authorizing us to repurchase up to $11.0 billion and $9.0 billion, respectively. The program approved in 2023 will become effective after the completion of the share repurchase program approved in 2022. The timing and actual number of additional shares repurchased will depend on a variety of factors, including cash requirements to meet the operating needs of the business, legal requirements, as well as the share price and economic and market conditions. The following table summarizes our share repurchase authorizations and repurchase activity of our Class A common stock through March 31, 2024:

Current wording

Repurchased shares of our common stock are considered treasury stock. In December 2023 and 2022, our Board of Directors approved share repurchase programs of our Class A common stock authorizing us to repurchase up to $11.0 billion and $9.0 billion, respectively. The program approved in 2023 became effective in May 2024 after the completion of the share repurchase program approved in 2022. The timing and actual number of additional shares repurchased will depend on a variety of factors, including cash requirements to meet the operating needs of the business, legal requirements, as well as the share price and economic and market conditions. The following table summarizes our share repurchase authorizations and repurchase activity of our Class A common stock through June 30, 2024: