Mastercard Inc

Previous wording

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

Current wording

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

Previous wording

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

Current wording

Other financial highlights for the nine months ended September 30, 2024 were as follows:

Previous wording

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

Current wording

•We generated net cash flows from operations of $9.9 billion.

Previous wording

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

Current wording

•We repurchased 16.5 million shares of our common stock for $7.6 billion and paid dividends of $1.8 billion.

Previous wording

•We completed a debt offering for an aggregate principal amount of $1.0 billion.

Current wording

•We completed debt offerings for an aggregate principal amount of $4.0 billion.

Previous 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.

Current wording

•In thethree and nine months ended September 30, 2024, we recorded net losses of $62 million ($63 million after tax, or $0.07 per diluted share) and $69 million ($67 million after tax, or $0.07 per diluted share), respectively, primarily related to unrealized fair market value adjustments on marketable and nonmarketable equity securities.

Previous wording

•In thethree and six months ended June 30, 2024, we recorded net losses of $13 million ($10 million after tax, or $0.01 per diluted share) and $7 million ($4 million after tax, or an immaterial impact per diluted share), respectively, primarily related to unrealized fair market value adjustments on marketable and nonmarketable equity securities.

Current wording

•In the three and nine months ended September 30, 2023, we recorded net losses of $6 million ($5 million after tax, or an immaterial impact per diluted share) and $95 million ($63 million after tax, or $0.07 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 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.

Current wording

•In the three months ended September 30, 2024, we recorded charges of $176 million ($120 million after tax, or $0.13 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. In the nine months ended September 30, 2024, we recorded charges of $400 million ($281 million after tax, or $0.30 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, settlements with a number of U.K. merchants and a legal provision associated with the ATM non-discrimination rule surcharge complaints.

Previous 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.

Current wording

•In the nine months ended September 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

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.

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.

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 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.

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 nine months ended September 30, 2024, GDV on a U.S. dollar-converted basis increased 9% and 8%, respectively, while GDV on a local currency basis increased 10% for each of the periods, 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 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.

Current wording

For the three months ended September 30, 2024, net revenue increased 13%, or 14% 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 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.

Current wording

Net revenue from our payment network increased 10%, or 11% 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 $4,630 million of rebates and incentives provided to customers, which increased 17%, or 19% 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 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.

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, (2) our consulting and marketing services, and fraud and security and identity and authentication solutions and (3) pricing.

Previous wording

For the six months ended June 30, 2024, net revenue increased 11%, or 12% 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 nine months ended September 30, 2024, net revenue increased 11%, or 12% 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 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 $8,322 million of rebates and incentives provided to customers, which increased 17%, or 18% 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.

Current wording

Net revenue from our payment network increased 8%, 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 $12,952 million of rebates and incentives provided to customers, which increased 17%, or 18% 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 17%, on both an as reported and 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.

Current wording

Net revenue from our value-added services and solutions increased 17%, on both an as reported and 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 and marketing services, and fraud and security and identity and authentication solutions.

Previous 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.

Current wording

For the three months ended September 30, 2024, operating expenses increased 25% versus the comparable period in 2023. Adjusted operating expenses increased 12%, on both an as adjusted and currency-neutral basis, versus the comparable period in 2023.

Previous wording

For the three months ended June 30, 2024, operating expenses increased 12% versus the comparable period in 2023. Adjusted operating expenses increased 9%, or 10% on a currency-neutral basis, versus the comparable period in 2023.

Current wording

For the nine months ended September 30, 2024, operating expenses increased 14% versus the comparable period in 2023. Adjusted operating expenses increased 10%, on both an as adjusted and currency-neutral basis, versus the comparable period in 2023.

Previous 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.

Current wording

For the nine months ended September 30, 2024, general and administrative expenses increased 14%, on both an as reported and currency-neutral basis, versus the comparable period in 2023. Current period results include an increase of 3 percentage points from a restructuring charge of $190 million. The remaining increase was primarily 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, as well as fulfillment costs to provide marketing services.

Previous wording

1 Foreign exchange activity includes the impact of remeasurement of assets and liabilities denominated in foreign currencies net of the impact of gains and losses on foreign exchange derivative contracts. See Note 16 (Derivative and Hedging Instruments) to the consolidated financial statements included in Part I, Item 1 for further discussion.

Current wording

2 Foreign exchange activity includes the impact of remeasurement of assets and liabilities denominated in foreign currencies net of the impact of gains and losses on foreign exchange derivative contracts. See Note 17 (Derivative and Hedging Instruments) to the consolidated financial statements included in Part I, Item 1 for further discussion.

Previous 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.

Current wording

For the three months ended September 30, 2024, advertising and marketing expenses increased 14%, on both an as reported and currency-neutral basis, versus the comparable period in 2023, primarily due to timing of marketing campaigns.

Previous wording

For the six months ended June 30, 2024, advertising and marketing expenses decreased 19%, or 18% on a currency-neutral basis, versus the comparable period in 2023, primarily due to timing of spending on sponsorships as well as timing of marketing campaigns.

Current wording

For the nine months ended September 30, 2024, advertising and marketing expenses decreased 7%, on both an as reported and currency-neutral basis, versus the comparable period in 2023, primarily due to timing of spending on sponsorships as well as timing of marketing campaigns.

Previous 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.

Current wording

For the three months ended September 30, 2024, depreciation and amortization expenses increased 7%, on both an as reported and currency-neutral basis, versus the comparable period in 2023. For the nine months ended September 30, 2024, depreciation and amortization expenses increased 12%, on both an as reported and currency-neutral basis, versus the comparable period in 2023. The increase for both the three and nine months ended September 30, 2024 was primarily due to increased software capitalization driven by the continued growth of our business.

Previous 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.

Current wording

For the three months ended September 30, 2024, we recorded charges of $176 million, 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. For the nine months ended September 30, 2024, we recorded charges of $400 million, 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, 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 15 (Legal and Regulatory Proceedings) to the consolidated financial statements included in Part I, Item 1 of this Report for further discussion.

Previous 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.

Current wording

The effective income tax rates were 15.6% and 15.0% for the three months ended September 30, 2024 and 2023, respectively. The adjusted effective income tax rates were 16.3% and 15.0% for the three months ended September 30, 2024 and 2023, respectively. Both the as-reported and as-adjusted effective income tax rates for the three months ended September 30, 2024 and 2023 were higher versus the comparable period in 2023, primarily due to our ability to claim more U.S. foreign tax credits generated in 2022 and 2023 resulting from Notice 2023-55 (the “Notice”), released by the U.S. Department of Treasury (“Treasury”) in 2023. The higher effective income tax rates were partially offset by a $115 million discrete tax expense in 2023 to establish a valuation allowance on the deferred tax asset related to U.S. foreign tax credits generated prior to 2022, as well as a change in our geographic mix of earnings in the current period.

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 may 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 (the “OECD”) Pillar 2 guidelines published to date include transition and safe harbor rules around the implementation of the 15% global minimum tax (the “Pillar 2 Rules”). Based on current enacted legislation, we do not expect a material impact in 2024. However, in 2025, we expect the Pillar 2 Rules will primarily offset the reduction to our effective income tax rate resulting from our incentive grant received from the Singapore Ministry of Finance. For the nine months ended September 30, 2024, this incentive grant reduced our effective income tax rate by approximately 4%. We are continuously 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 $1.8 billion and $1.9 billion at June 30, 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 $1.9 billion at September 30, 2024 and December 31, 2023.

Previous 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.

Current wording

Net cash provided by operating activities increased $2,096 million for the nine months ended September 30, 2024, versus the comparable period in 2023, primarily due to higher net income after adjusting for non-cash items as well as lower cash payments for litigation settlements, partially offset by higher customer incentive payments.

Previous 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.

Current wording

Net cash used in investing activities decreased $413 million for the nine months ended September 30, 2024, versus the comparable period in 2023, primarily due to higher proceeds from maturities and sales of investment securities.

Previous 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.

Current wording

Net cash used in financing activities decreased $343 million for the nine months ended September 30, 2024, versus the comparable period in 2023, primarily due to higher cash proceeds received from debt issuances, partially offset by repayments of debt and higher cash paid for repurchases of our Class A common stock and dividends.

Previous 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.

Current wording

In April 2024, $1 billion of principal related to the 2014 USD Notes matured and was paid. In July 2024, INR28.1 billion ($336 million as of payment date) of principal related to the 2023 INR Term Loan matured and was paid.

Previous wording

As of June 30, 2024, we have a commercial paper program (the “Commercial Paper Program”), under which we are authorized to issue up to $8 billion in outstanding notes, with maturities up to 397 days from the date of issuance. In conjunction with the Commercial Paper Program, we have a committed unsecured $8 billion revolving credit facility (the “Credit Facility”), which expires in November 2028.

Current wording

As of September 30, 2024, we have a commercial paper program (the “Commercial Paper Program”), under which we are authorized to issue up to $8 billion in outstanding notes, with maturities up to 397 days from the date of issuance. In conjunction with the Commercial Paper Program, we have a committed unsecured $8 billion revolving credit facility (the “Credit Facility”) that expires in November 2028.

Previous wording

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

Current wording

Aggregate payments for quarterly dividends totaled $1,842 million for the nine months ended September 30, 2024.

Previous 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.

Current wording

On September 16, 2024, our Board of Directors declared a quarterly cash dividend of $0.66 per share payable on November 8, 2024 to holders of record on October 9, 2024 of our Class A common stock and Class B common stock. The aggregate amount of this dividend is $606 million.