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MarketScreener Homepage  >  Equities  >  Nyse  >  Mastercard Incorporated    MA

MASTERCARD INCORPORATED

(MA)
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Mastercard Incorporated : Q3 ()

11/19/2020 | 05:23am EST

Earnings Release

Mastercard Incorporated Reports Third-Quarter 2020 Financial Results

  • Third-quarternet income of $1.5 billion, or diluted earnings per share (EPS) of $1.51
  • Third-quarteradjusted net income of $1.6 billion, or adjusted diluted EPS of $1.60
  • Third-quarternet revenue of $3.8 billion, a decrease of 14% on both an as reported and a currency-neutral basis
  • Third-quartergross dollar volume up 1% and purchase volume up 2%, returning to positive territory

Purchase, NY - October 28, 2020 - Mastercard Incorporated (NYSE: MA) today announced financial results for the third quarter of 2020.

"Mastercard has been focused on helping merchants, banks, fintechs, governments and consumers with products and services to navigate the pandemic. We are seeing encouraging progress in the trajectory of domestic spending, while travel spending remains a challenge," said Ajay Banga, Mastercard CEO. "Meanwhile, we are winning new business in core payments and are making real progress with our digital solutions, differentiated service offerings and multi-rail capabilities."

Quarterly Results

Third-Quarter Operating Results

Increase / (Decrease)

$ in billions, except per share data

Q3 2020

Q3 2019

Reported

Currency-

GAAP

neutral

Net revenue

$3.8

$4.5

(14)%

(14)%

Operating expenses

$1.7

$1.8

(4)%

(5)%

Operating income

$2.1

$2.7

(21)%

(20)%

Operating margin

54.9%

59.4%

(4.6) ppt

(4.2) ppt

Effective income tax rate

21.0%

16.9%

4.1 ppt

4.3 ppt

Net income

$1.5

$2.1

(28)%

(27)%

Diluted EPS

$1.51

$2.07

(27)%

(26)%

Key Third-QuarterNon-GAAP Results 1

Increase / (Decrease)

$ in billions, except per share data

Q3 2020

Q3 2019

As adjusted

Currency-

neutral

Net revenue

$3.8

$4.5

(14)%

(14)%

Adjusted operating expenses

$1.7

$1.8

(4)%

(5)%

Adjusted operating margin

54.9%

59.4%

(4.6) ppt

(4.2) ppt

Adj. effective income tax rate

20.0%

16.8%

3.2 ppt

3.3 ppt

Adjusted net income

$1.6

$2.2

(27)%

(26)%

Adjusted diluted EPS

$1.60

$2.15

(26)%

(25)%

1. The Key Third-QuarterNon-GAAP Results exclude the impact of gains and losses on the company's equity investments and/or currency. See page 11 for the company's non-GAAP adjustments and the reconciliation to GAAP reported amounts.

Q3 2020 Key Business Drivers

(YoY growth)

Gross dollar volume

Cross-border volume

Switched

(local currency basis)

(local currency basis)

transactions

up 1%

down 36%

up 5%

The following additional details are provided to aid in understanding Mastercard's third-quarter 2020 results, versus the year-ago period:

  • Net revenue decreased 14% on both an as reported and a currency-neutral basis, which reflects the impacts of COVID-19 and includes a 1 percentage point benefit from acquisitions. The decline was driven by the impact of the following factors:
    • Cross-bordervolume decline of 36% on a local currency basis.
    • Rebates and incentives were flat, but increased 2% on a currency-neutral basis.
    • These decreases to net revenue were partially offset by:
      • Gross dollar volume growth of 1% , on a local currency basis, to $1.6 trillion.
      • Switched transactions growth of 5%.
      • Other revenues growth of 5%, or 6% on a currency-neutral basis. This includes a 2 percentage point increase due to acquisitions. The remaining growth was driven primarily by the company's Cyber & Intelligence and Data & Services solutions.
  • Total operating expenses decreased 4%, or 5% on a currency-neutral basis. This includes 3 percentage points of growth from acquisitions. Excluding acquisitions, expenses decreased 8% primarily related to lower advertising and marketing, travel, personnel costs and professional fee spend. There were no special items in the current or comparable period.
  • Other income (expense) was unfavorable $69 million versus the year-ago period. Excluding the impact of gains and losses on equity investments, adjusted other income (expense) was unfavorable by $78 million versus the year-ago period, primarily due to increased interest expense related to debt issuances in the current year.
  • The effective tax rate for the third quarter of 2020 was 21.0%, versus 16.9% for the comparable period in 2019, primarily due to a discrete tax benefit related to a favorable court ruling in 2019 and certain losses on equity investments that did not provide any tax benefit in the current period. The adjusted effective tax rate for the third quarter of 2020 was 20.0%, versus 16.8% for the comparable period in 2019, primarily due to a discrete tax benefit related to a favorable court ruling in 2019.
  • As of September 30, 2020, the company's customers had issued 2.7 billion Mastercard and Maestro- branded cards.

Return of Capital to Shareholders

During the third quarter of 2020, Mastercard repurchased approximately 6.5 million shares at a cost of $2.1 billion and paid $402 million in dividends. Quarter-to-date through October 23, the company repurchased approximately 1.1 million shares at a cost of $392 million, which leaves $4.5 billion remaining under the current repurchase program authorization.

2

Year-to-Date Results

Year-to-Date Operating Results

Increase / (decrease)

$ in billions, except per share data

2020

2019

Reported

Currency-

GAAP

neutral

Net revenue

$11.2

$12.5

(10)%

(9)%

Operating expenses

$5.2

$5.2

(1)%

-%

Operating income

$6.0

$7.3

(17)%

(15)%

Operating margin

53.9%

58.3%

(4.4) ppt

(4.1) ppt

Effective income tax rate

17.3%

17.1%

0.2 ppt

0.4 ppt

Net income

$4.6

$6.0

(23)%

(22)%

Diluted EPS

$4.59

$5.87

(22)%

(20)%

Key Year-to-DateNon-GAAP Results 1

Increase / (decrease)

$ in billions, except per share data

2020

2019

As adjusted

Currency-

neutral

Net revenue

$11.2

$12.5

(10)%

(9)%

Adjusted operating expenses

$5.1

$5.2

(1)%

(1)%

Adjusted operating margin

54.1%

58.3%

(4.1) ppt

(3.8) ppt

Adj. effective income tax rate

17.1%

17.4%

(0.3) ppt

(0.1) ppt

Adjusted net income

$4.8

$6.0

(19)%

(18)%

Adjusted diluted EPS

$4.78

$5.81

(18)%

(16)%

1. The Key Year-to-DateNon-GAAP Results exclude the impact of gains and losses on the company's equity investments, special items as described on page 12 ("Year- to-Date Special Items") and/or currency. See page 12 for the company's non-GAAP adjustments and the reconciliation to GAAP reported amounts.

Year-to-Date 2020 Key Business Drivers

(YoY growth)

Gross dollar volume

Cross-border volume2

Switched

(local currency basis)

(local currency basis)

Transactions2

down 0.4%

down 29%

up 2%

2. Growth rates normalized to eliminate the effects of differing switching and carryover days between periods. Carryover days are those where transactions and volumes from days where the company does not clear and settle are processed.

The following additional details are provided to aid in understanding Mastercard's Year-to-Date 2020 results, versus the year-ago period:

  • Net revenue decreased 10%, or 9% on a currency-neutral basis, which reflects the impacts of COVID-19 and includes a 1 percentage point benefit from acquisitions. The decline was driven by the impact of the following factors:
    • Gross dollar volume decline of 0.4% , on a local currency basis, to $4.6 trillion.
    • Cross-bordervolume decline of 29% on a local currency basis.
    • Rebates and incentives growth of 4%, or 6% on a currency-neutral basis, primarily due to new and renewed deals, partially offset by a favorable mix of incentive-related volumes.
    • These decreases to net revenue were partially offset by:
      • Switched transactions growth of 2%.
      • Other revenues growth of 14%, or 15% on a currency-neutral basis. This includes a 4 percentage point increase due to acquisitions. The remaining growth was driven primarily by the company's Cyber & Intelligence and Data & Services solutions.

3

  • Total operating expenses decreased 1%. Excluding the impact of Year-to-Date Special Items, adjusted operating expenses decreased 1% both as adjusted and on a currency-neutral basis. This includes 4 percentage points of growth from acquisitions. Excluding acquisitions, expenses decreased 5% primarily related to lower advertising and marketing, travel and professional fee spend, partially offset by higher personnel costs to support the company's continued investment in its strategic initiatives.
  • Other income (expense) was unfavorable $422 million versus the year-ago period, primarily due to net unrealized losses recorded on equity investments in the current period versus net gains in the prior period. Excluding this activity, adjusted other income (expense) was unfavorable by $184 million versus the year-ago period, primarily due to increased interest expense related to recent debt issuances.
  • The effective tax rate for the first nine months of 2020 was 17.3%, versus 17.1% for the comparable period in 2019, primarily due to discrete tax benefits related to a favorable court ruling and a reduction to the Company's transition tax liability in 2019 as well as certain losses on equity investments that did not provide any tax benefit in the current period, partially offset by a more favorable geographic mix of earnings in the current period. The adjusted effective tax rate for the first nine months of 2020 was 17.1%, versus 17.4% for the comparable period in 2019, primarily due to a more favorable geographic mix of earnings, partially offset by a discrete tax benefit related to a favorable court ruling in 2019.

Third-Quarter 2020 Financial Results Conference Call Details

At 9:00 a.m. ET today, the company will host a conference call to discuss its third-quarter 2020 results.

The dial-in information for this call is 833-714-0894 (within the U.S.) and 778-560-2664 (outside the U.S.). A replay of the call will be available for 30 days and can be accessed by dialing 800-585-8367 (within the U.S.) and 416-621-4642 (outside the U.S.), using passcode 2393503.

A live audio webcast of this call, along with presentation slides, can also be accessed through the Investor Relations section of the company's website at investor.mastercard.com.

Forward-Looking Statements

This press release 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 press release, 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 Mastercard's future prospects, developments and business strategies. We caution you to not place undue reliance on these forward-looking statements, as they speak only as of the date they are made. Except for the company's ongoing obligations under the U.S. federal securities laws, the company does not intend to update or otherwise revise the forward-looking information to reflect actual results of operations, changes in financial condition, changes in estimates, expectations or assumptions, changes in general economic or industry conditions or other circumstances arising and/or existing since the preparation of this press release or to reflect the occurrence of any unanticipated events.

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)

4

  • 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 payment systems and issuer 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 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 real-timeaccount-based payment 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 financial institution customers (including loss of substantial business from significant customers, competitor relationships with our customers and banking industry consolidation), merchants and 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
  • the impact of the coronavirus (COVID-19) outbreak and measures taken in response to the outbreak
  • 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

For additional information on these and other factors that could cause the company's actual results to differ materially from expected results, please see the company's filings with the Securities and Exchange Commission, including the company's Annual Report on Form 10-K for the year ended December 31, 2019 and any subsequent reports on Forms 10-Q and 8-K.

About Mastercard Incorporated

Mastercard (NYSE: MA), www.mastercard.com, is a technology company in the global payments industry. Our global payments processing network connects consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories. Mastercard products and solutions make everyday commerce activities - such as shopping, traveling, running a business and managing finances

  • easier, more secure and more efficient for everyone. Follow us on Twitter @MastercardNews, join the discussion on the Beyond the Transaction Blog and subscribe for the latest news on the Engagement Bureau.

5

Contacts:

Investor Relations:

Media Relations:

Warren Kneeshaw or Gina Accordino

Seth Eisen

investor.relations@mastercard.com

Seth.Eisen@mastercard.com

914-249-4565

914-249-3153

6

Consolidated Statement of Operations (Unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

2020

2019

2020

2019

(in millions, except per share data)

Net Revenue

$

3,837

$

4,467

$

11,181

$

12,469

Operating Expenses

General and administrative

1,423

1,448

4,285

4,184

Advertising and marketing

168

227

415

644

Depreciation and amortization

141

137

430

376

Provision for litigation

-

-

28

-

Total operating expenses

1,732

1,812

5,158

5,204

Operating income

2,105

2,655

6,023

7,265

Other Income (Expense)

Investment income

3

26

27

77

Gains (losses) on equity investments, net

(91)

(100)

(190)

48

Interest expense

(105)

(63)

(275)

(160)

Other income (expense), net

3

16

7

26

Total other income (expense)

(190)

(121)

(431)

(9)

Income before income taxes

1,915

2,534

5,592

7,256

Income tax expense

402

426

966

1,238

Net Income

$

1,513

$

2,108

$

4,626

$

6,018

Basic Earnings per Share

$

1.51

$

2.08

$

4.61

$

5.90

Basic weighted-average shares outstanding

1,001

1,013

1,003

1,020

Diluted Earnings per Share

$

1.51

$

2.07

$

4.59

$

5.87

Diluted weighted-average shares outstanding

1,005

1,019

1,008

1,025

7

Consolidated Balance Sheet (Unaudited)

September 30,

December 31,

2020

2019

(in millions, except per share data)

Assets

Current assets:

Cash and cash equivalents

$

10,225

$

6,988

Restricted cash for litigation settlement

586

584

Investments

400

688

Accounts receivable

2,357

2,514

Settlement due from customers

1,375

2,995

Restricted security deposits held for customers

1,568

1,370

Prepaid expenses and other current assets

1,958

1,763

Total current assets

18,469

16,902

Property, equipment and right-of-use assets, net of accumulated depreciation and

amortization of $1,298 and $1,100, respectively

1,887

1,828

Deferred income taxes

607

543

Goodwill

4,159

4,021

Other intangible assets, net of accumulated amortization of $1,416 and $1,296, respectively

1,507

1,417

Other assets

4,965

4,525

Total Assets

31,594

$

29,236

Liabilities, Redeemable Non-controlling Interests and Equity

Current liabilities:

Accounts payable

$

341

$

489

Settlement due to customers

1,129

2,714

Restricted security deposits held for customers

1,568

1,370

Accrued litigation

798

914

Accrued expenses

5,011

5,489

Other current liabilities

1,111

928

Total current liabilities

9,958

11,904

Long-term debt

12,574

8,527

Deferred income taxes

86

85

Other liabilities

3,095

2,729

Total Liabilities

25,713

23,245

Commitments and Contingencies

Redeemable Non-controlling Interests

25

74

Stockholders' Equity

Class A common stock, $0.0001 par value; authorized 3,000 shares, 1,395 and 1,391 shares

issued and 990 and 996 shares outstanding, respectively

-

-

Class B common stock, $0.0001 par value; authorized 1,200 shares, 8 and 11 shares issued and

outstanding, respectively

-

-

Additional paid-in-capital

4,926

4,787

Class A treasury stock, at cost, 406 and 395 shares, respectively

(35,653)

(32,205)

Retained earnings

37,403

33,984

Accumulated other comprehensive income (loss)

(880)

(673)

Mastercard Incorporated Stockholders' Equity

5,796

5,893

Non-controlling interests

60

24

Total Equity

5,856

5,917

Total Liabilities, Redeemable Non-controlling Interests and Equity

$

31,594

$

29,236

8

Consolidated Statement of Cash Flows (Unaudited)

Nine Months Ended September 30,

2020

2019

(in millions)

Operating Activities

$

4,626

$

6,018

Net income

Adjustments to reconcile net income to net cash provided by operating activities:

Amortization of customer and merchant incentives

749

878

Depreciation and amortization

430

376

(Gains) losses on equity investments, net

190

(48)

Share-based compensation

202

207

Deferred income taxes

7

14

Other

15

21

Changes in operating assets and liabilities:

Accounts receivable

112

(278)

Settlement due from customers

1,618

(171)

Prepaid expenses

(1,291)

(1,440)

Accrued litigation and legal settlements

(116)

(637)

Restricted security deposits held for customers

198

93

Accounts payable

(145)

(36)

Settlement due to customers

(1,587)

(77)

Accrued expenses

(399)

266

Net change in other assets and liabilities

362

17

Net cash provided by operating activities

4,971

5,203

Investing Activities

Purchases of investment securities available-for-sale

(161)

(549)

Purchases of investments held-to-maturity

(126)

(167)

Proceeds from sales of investment securities available-for-sale

349

1,003

Proceeds from maturities of investment securities available-for-sale

127

305

Proceeds from maturities of investments held-to-maturity

84

334

Purchases of property and equipment

(280)

(306)

Capitalized software

(277)

(237)

Purchases of equity investments

(183)

(391)

Acquisition of businesses, net of cash acquired

(183)

(1,170)

Settlement of interest rate derivative contracts

(175)

-

Other investing activities

-

(2)

Net cash used in investing activities

(825)

(1,180)

Financing Activities

Purchases of treasury stock

(3,443)

(5,503)

Dividends paid

(1,206)

(1,012)

Proceeds from debt, net

3,959

1,980

Payment of debt

-

(500)

Acquisition of redeemable non-controlling interests

(49)

-

Contingent consideration paid

-

(199)

Tax withholdings related to share-based payments

(145)

(161)

Cash proceeds from exercise of stock options

88

107

Other financing activities

19

3

Net cash used in financing activities

(777)

(5,285)

Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents

66

(103)

Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents

3,435

(1,365)

Cash, cash equivalents, restricted cash and restricted cash equivalents - beginning of period

8,969

8,337

Cash, cash equivalents, restricted cash and restricted cash equivalents - end of period

$

12,404

$

6,972

9

Non-GAAP Financial Information

Mastercard discloses the following non-GAAP financial measures: adjusted operating expenses, adjusted operating margin, adjusted other income (expense), adjusted effective income tax rate, adjusted net income and adjusted diluted earnings per share (as well as related applicable growth rates versus the comparable period in the prior year). These non-GAAP financial measures exclude the impact of gains and losses on the company's equity investments which includes mark-to-market fair value adjustments, impairments and gains and losses upon disposition, as well as the related tax impacts. These non-GAAP financial measures also exclude the impact of special items, where applicable, which represent litigation judgments and settlements and certain one-time items, as well as the related tax impacts. The company excluded these items because management evaluates the underlying operations and performance of the company separately from these recurring and nonrecurring items.

In addition, the company presents growth rates adjusted for the impact of currency, which is a non-GAAP financial measure. 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. The impact of currency translation represents the effect of translating operating results where the functional currency is different from the company's 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. The company believes the presentation of currency-neutral growth rates provides relevant information to facilitate an understanding of its operating results.

The company believes that the non-GAAP financial measures presented facilitate an understanding of operating performance and provide a meaningful comparison of its results between periods. The company's management uses non-GAAP financial measures to, among other things, evaluate its ongoing operations in relation to historical results, for internal planning and forecasting purposes and in the calculation of performance-based compensation.

The company includes reconciliations of the requisite non-GAAP financial measures to the most directly comparable GAAP financial measures. The presentation of non-GAAP financial measures should not be considered in isolation or as a substitute for the company's related financial results prepared in accordance with GAAP.

10

Non-GAAP Reconciliations (QTD)

Three Months Ended September 30, 2020

Operating

Operating

Other Income

Effective

Diluted earnings

income tax

Net income

expenses

margin

(Expense)

rate

per share

($ in millions, except per share data)

Reported - GAAP

$

1,732

54.9 %

$

(190)

21.0 %

$

1,513

$

1.51

(Gains) losses on equity

investments 1

**

**

91

(1.0)%

92

0.09

Non-GAAP

$

1,732

54.9 %

$

(99)

20.0 %

$

1,605

$

1.60

Three Months Ended September 30, 2019

Operating

Operating

Other Income

Effective

Diluted earnings

income tax

Net income

expenses

margin

(Expense)

rate

per share

($ in millions, except per share data)

Reported - GAAP

$

1,812

59.4 %

$

(121)

16.9 %

$

2,108

$

2.07

(Gains) losses on equity

investments 1

**

**

100

- %

84

0.08

Non-GAAP

$

1,812

59.4 %

$

(21)

16.8 %

$

2,191

$

2.15

Three Months Ended September 30, 2020 as compared to the Three Months Ended September 30, 2019

Increase/(Decrease)

Operating

Operating

Effective

Diluted earnings

Net revenue

income tax

Net income

expenses

margin

rate

per share

Reported - GAAP

(14)%

(4)%

(4.6) ppt

4.1 ppt

(28)%

(27)%

(Gains) losses on equity

investments 1

**

**

**

(0.9) ppt

1%

1%

Non-GAAP

(14)%

(4)%

(4.6) ppt

3.2 ppt

(27)%

(26)%

Currency impact 2

-%

-%

0.3 ppt

0.1 ppt

1%

1%

Non-GAAP - currency-neutral

(14)%

(5)%

(4.2) ppt

3.3 ppt

(26)%

(25)%

Note: Tables may not sum due to rounding.

  • Not applicable

Gains and Losses on Equity Investments

1. Q3'20 and Q3'19, net losses of $91 million and $100 million, respectively, were primarily related to unrealized fair market value adjustments on marketable and non-marketable equity securities.

Other Notes

2. Represents the translational and transactional impact of currency.

11

Non-GAAP Reconciliations (YTD)

Nine Months Ended September 30, 2020

Operating

Operating

Other Income

Effective

Diluted earnings

income tax

Net income

expenses

margin

(Expense)

rate

per share

($ in millions, except per share data)

Reported - GAAP

$

5,158

53.9 %

$

(431)

17.3 %

$

4,626

$

4.59

(Gains) losses on equity

investments 1

**

**

190

(0.2)%

171

0.17

Litigation provisions 2

(28)

0.3 %

**

- %

22

0.02

Non-GAAP

$

5,129

54.1 %

$

(241)

17.1 %

$

4,819

$

4.78

Nine Months Ended September 30, 2019

Operating

Operating

Other Income

Effective

Diluted earnings

income tax

Net income

expenses

margin

(Expense)

rate

per share

($ in millions, except per share data)

Reported - GAAP

$

5,204

58.3 %

$

(9)

17.1 %

$

6,018

$

5.87

(Gains) losses on equity

investments 1

**

**

(48)

(0.1)%

(32)

(0.03)

Tax act 3

**

**

**

0.4 %

(30)

(0.03)

Non-GAAP

$

5,204

58.3 %

$

(57)

17.4 %

$

5,956

$

5.81

Nine Months Ended September 30, 2020 as compared to the Nine Months Ended September 30, 2019

Increase/(Decrease)

Operating

Operating

Effective

Diluted earnings

Net revenue

income tax

Net income

expenses

margin

rate

per share

Reported - GAAP

(10)%

(1)%

(4.4) ppt

0.2 ppt

(23)%

(22)%

(Gains) losses on equity

investments 1

**

**

**

(0.1) ppt

3%

3%

Litigation provisions 2

**

(1)%

0.3 ppt

- ppt

-%

-%

Tax act 3

**

**

**

(0.4) ppt

-%

-%

Non-GAAP

(10)%

(1)%

(4.1) ppt

(0.3) ppt

(19)%

(18)%

Currency impact 4

1%

1%

0.3 ppt

0.2 ppt

2%

2%

Non-GAAP - currency-neutral

(9)%

(1)%

(3.8) ppt

(0.1) ppt

(18)%

(16)%

Note: Tables may not sum due to rounding.

  • Not applicable

Gains and Losses on Equity Investments

1. Year-to-date 2020 and year-to-date 2019, net losses of $190 million and net gains of $48 million, respectively, were primarily related to unrealized fair market value adjustments on marketable and non-marketable equity securities.

Year-to-Date Special Items

  1. Year-to-date2020 pre-tax charges of $28 million related to estimated attorneys' fees and litigation settlements with U.K. and Pan-European merchants.
  2. Year-to-date2019 net tax benefit of $30 million related to a reduction to the 2017 one-time deemed repatriation tax on accumulated foreign earnings resulting from final transition tax regulations issued in 2019.

Other Notes

4. Represents the translational and transactional impact of currency.

12

Mastercard Incorporated Operating Performance

For the 3 Months Ended September 30, 2020

GDV

Growth

Growth

Purchase

Growth

Purchase

Purchase

Cash

Growth

Cash

Cards

Volume

Trans.

Trans.

Volume

Trans.

(Bil.)

(USD)

(Local)

(Bil.)

(Local)

(Mil.)

Growth

(Bil.)

(Local)

(Mil.)

(Mil.)

All Mastercard Credit, Charge and Debit Programs

APMEA

$

483

(1.5)%

(1.4)%

$

329

- %

6,800

3.9 %

$

154

(4.2)%

1,577

873

Canada

45

(3.8)%

(3.0)%

44

(1.8)%

721

(3.5)%

1

(30.6)%

5

62

Europe

518

2.0 %

2.7 %

353

3.6 %

11,706

14.4 %

165

0.9 %

1,061

632

Latin America

88

(22.2)%

(6.8)%

59

(1.8)%

2,753

(5.8)%

30

(15.4)%

246

223

Worldwide less

1,135

(2.1)%

(0.1)%

785

1.3 %

21,980

7.5 %

350

(3.1)%

2,889

1,790

United States

United States

513

4.0 %

4.0 %

451

4.0 %

7,829

1.1 %

62

3.9 %

323

485

Worldwide

1,648

(0.3)%

1.2 %

1,236

2.3 %

29,809

5.7 %

412

(2.1)%

3,212

2,275

Mastercard Credit and Charge Programs

Worldwide less

523

(9.4)%

(7.6)%

489

(7.0)%

10,030

(1.1)%

34

(14.6)%

158

709

United States

United States

214

(12.4)%

(12.4)%

210

(10.1)%

2,420

(9.9)%

4

(65.0)%

6

234

Worldwide

737

(10.3)%

(9.0)%

699

(8.0)%

12,451

(2.9)%

37

(24.8)%

163

943

Mastercard Debit Programs

Worldwide less

612

5.1 %

7.3 %

296

19.0 %

11,950

16.0 %

316

(1.7)%

2,731

1,081

United States

United States

299

20.2 %

20.2 %

240

20.7 %

5,409

6.9 %

59

17.8 %

318

250

Worldwide

911

9.6 %

11.2 %

537

19.7 %

17,359

13.0 %

375

0.9 %

3,049

1,331

For the 9 Months Ended September 30, 2020

GDV

Growth

Growth

Purchase

Growth

Purchase

Purchase

Cash

Growth

Cash

Cards

Volume

Trans.

Trans.

Volume

Trans.

(Bil.)

(USD)

(Local)

(Bil.)

(Local)

(Mil.)

Growth

(Bil.)

(Local)

(Mil.)

(Mil.)

All Mastercard Credit, Charge and Debit Programs

APMEA

$

1,361

(4.7)%

(2.6)%

$

920

(1.3)%

18,994

3.9 %

$

441

(5.0)%

4,620

873

Canada

124

(5.9)%

(4.1)%

118

(4.7)%

1,946

(5.9)%

6

8.8 %

14

62

Europe

1,382

(2.3)%

0.5 %

932

0.9 %

30,982

10.2 %

450

(0.3)%

2,965

632

Latin America

268

(18.1)%

(3.4)%

177

1.2 %

8,007

(1.4)%

92

(11.2)%

753

223

Worldwide less

3,136

(5.1)%

(1.4)%

2,147

(0.4)%

59,929

5.9 %

988

(3.5)%

8,352

1,790

United States

United States

1,454

1.7 %

1.7 %

1,274

1.7 %

22,113

(0.4)%

180

1.2 %

914

485

Worldwide

4,589

(3.0)%

(0.4)%

3,421

0.4 %

82,042

4.1 %

1,168

(2.8)%

9,266

2,275

Mastercard Credit and Charge Programs

Worldwide less

1,486

(10.8)%

(7.2)%

1,381

(7.2)%

28,142

(0.6)%

104

(7.6)%

468

709

United States

United States

624

(10.0)%

(10.0)%

605

(9.0)%

6,917

(7.7)%

19

(34.8)%

19

234

Worldwide

2,110

(10.6)%

(8.1)%

1,987

(7.7)%

35,058

(2.1)%

123

(13.1)%

486

943

Mastercard Debit Programs

Worldwide less

1,650

0.8 %

4.5 %

766

14.8 %

31,787

12.5 %

884

(3.0)%

7,885

1,081

United States

United States

830

12.7 %

12.7 %

668

13.9 %

15,197

3.3 %

162

8.0 %

895

250

Worldwide

2,480

4.5 %

7.1 %

1,435

14.4 %

46,984

9.3 %

1,045

(1.4)%

8,780

1,331

13

Mastercard Incorporated Operating Performance (continued)

For the 3 Months ended September 30, 2019

GDV

Growth

Growth

Purchase

Growth

Purchase

Purchase

Cash

Growth

Cash

Cards

Volume

Trans.

Trans.

Volume

Trans.

(Bil.)

(USD)

(Local)

(Bil.)

(Local)

(Mil.)

Growth

(Bil.)

(Local)

(Mil.)

(Mil.)

All Mastercard Credit, Charge and Debit Programs

APMEA

$

490

10.2 %

12.4 %

$

327

10.6 %

6,545

20.9 %

$

163

16.0 %

1,739

831

Canada

47

7.7 %

8.8 %

45

9.3 %

748

14.9 %

2

(2.8)%

6

62

Europe

508

16.0 %

19.8 %

339

21.7 %

10,230

31.5 %

169

16.1 %

1,195

579

Latin America

113

14.4 %

18.2 %

74

22.8 %

2,923

27.1 %

39

10.4 %

302

200

Worldwide less

1,159

13.0 %

15.9 %

785

16.2 %

20,446

26.7 %

373

15.3 %

3,241

1,673

United States

United States

493

11.6 %

11.6 %

433

12.6 %

7,745

11.7 %

60

4.8 %

339

467

Worldwide

1,652

12.6 %

14.6 %

1,219

14.9 %

28,191

22.2 %

433

13.7 %

3,579

2,139

Mastercard Credit and Charge Programs

Worldwide less

577

7.9 %

11.0 %

536

11.3 %

10,140

20.3 %

41

7.1 %

189

682

United States

United States

244

14.6 %

14.6 %

234

14.4 %

2,687

15.8 %

10

19.9 %

9

238

Worldwide

821

9.8 %

12.0 %

770

12.2 %

12,827

19.3 %

51

9.4 %

198

920

Mastercard Debit Programs

Worldwide less

582

18.5 %

21.3 %

250

28.4 %

10,306

33.6 %

332

16.4 %

3,052

991

United States

United States

249

8.8 %

8.8 %

199

10.6 %

5,058

9.7 %

50

2.2 %

329

229

Worldwide

831

15.4 %

17.2 %

449

19.9 %

15,364

24.7 %

382

14.3 %

3,381

1,219

For the 9 Months ended September 30, 2019

GDV

Growth

Growth

Purchase

Growth

Purchase

Purchase

Cash

Growth

Cash

Cards

Volume

Trans.

Trans.

Volume

Trans.

(Bil.)

(USD)

(Local)

(Bil.)

(Local)

(Mil.)

Growth

(Bil.)

(Local)

(Mil.)

(Mil.)

All Mastercard Credit, Charge and Debit Programs

APMEA

$

1,428

7.4 %

11.9 %

$

952

10.1 %

18,281

19.6 %

$

476

15.6 %

5,056

831

Canada

132

4.2 %

7.5 %

126

7.7 %

2,068

12.4 %

5

4.2 %

17

62

Europe

1,415

10.6 %

18.6 %

945

20.2 %

28,117

30.4 %

470

15.4 %

3,411

579

Latin America

328

8.8 %

15.8 %

213

20.3 %

8,117

24.0 %

115

8.3 %

872

200

Worldwide less

3,303

8.7 %

14.9 %

2,236

15.0 %

56,584

25.1 %

1,066

14.6 %

9,357

1,673

United States

United States

1,430

9.7 %

9.7 %

1,252

11.0 %

22,209

10.2 %

178

1.5 %

995

467

Worldwide

4,733

9.0 %

13.2 %

3,488

13.5 %

78,793

20.5 %

1,244

12.5 %

10,352

2,139

Mastercard Credit and Charge Programs

Worldwide less

1,666

3.6 %

9.9 %

1,548

10.2 %

28,319

18.2 %

118

5.2 %

547

682

United States

United States

694

12.2 %

12.2 %

665

12.4 %

7,494

13.7 %

28

7.1 %

27

238

Worldwide

2,359

6.0 %

10.5 %

2,213

10.9 %

35,813

17.2 %

146

5.6 %

574

920

Mastercard Debit Programs

Worldwide less

1,637

14.4 %

20.4 %

689

27.3 %

28,265

32.9 %

948

15.9 %

8,810

991

United States

United States

737

7.5 %

7.5 %

587

9.4 %

14,714

8.5 %

150

0.5 %

969

229

Worldwide

2,373

12.2 %

16.1 %

1,275

18.4 %

42,980

23.4 %

1,098

13.5 %

9,778

1,219

APMEA = Asia Pacific / Middle East / Africa

Note that the figures in the preceding tables may not sum due to rounding; growth represents change from the comparable year-ago period.

14

Footnote

The tables set forth the gross dollar volume ("GDV"), purchase volume, cash volume and the number of purchase transactions, cash transactions and cards on a regional and global basis for Mastercard™-branded cards. Growth rates over prior periods are provided for volume-based data.

Debit transactions on Maestro® and Cirrus®-branded cards and transactions involving brands other than Mastercard are not included in the preceding tables.

For purposes of the table: GDV represents purchase volume plus cash volume and includes the impact of balance transfers and convenience checks; "purchase volume" means the aggregate dollar amount of purchases made with Mastercard-branded cards for the relevant period; and "cash volume" means the aggregate dollar amount of cash disbursements obtained with Mastercard-branded cards for the relevant period. The number of cards includes virtual cards, which are Mastercard-branded payment accounts that do not generally have physical cards associated with them.

The Mastercard payment product is comprised of credit, charge, debit and prepaid programs, and data relating to each type of program is included in the tables. The tables include information with respect to transactions involving Mastercard-branded cards that are not switched by Mastercard and transactions for which Mastercard does not earn significant revenues.

Information denominated in U.S. dollars is calculated by applying an established U.S. dollar/local currency exchange rate for each local currency in which Mastercard volumes are reported. These exchange rates are calculated on a quarterly basis using the average exchange rate for each quarter. Mastercard reports period-over-period rates of change in purchase volume and cash volume on the basis of local currency information, in order to eliminate the impact of changes in the value of currencies against the U.S. dollar in calculating such rates of change.

The data set forth in the GDV, purchase volume, purchase transactions, cash volume and cash transactions columns is provided by Mastercard customers and is subject to verification by Mastercard and partial cross- checking against information provided by Mastercard's transaction switching systems. The data set forth in the cards columns is provided by Mastercard customers and is subject to certain limited verification by Mastercard. A portion of the data set forth in the cards columns reflects the impact of routine portfolio changes among customers and other practices that may lead to over counting of the underlying data in certain circumstances. All data is subject to revision and amendment by Mastercard or Mastercard's customers.

Performance information for prior periods can be found in the Investor Relations section of the Mastercard website at investor.mastercard.com.

15

Disclaimer

MasterCard Inc. published this content on 28 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 November 2020 10:22:01 UTC


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Sales 2020 15 199 M - -
Net income 2020 6 160 M - -
Net Debt 2020 1 737 M - -
P/E ratio 2020 53,5x
Yield 2020 0,47%
Capitalization 328 B 328 B -
EV / Sales 2020 21,7x
EV / Sales 2021 18,2x
Nbr of Employees 18 600
Free-Float 62,3%
Chart MASTERCARD INCORPORATED
Duration : Period :
Mastercard Incorporated Technical Analysis Chart | MA | US57636Q1040 | MarketScreener
Technical analysis trends MASTERCARD INCORPORATED
Short TermMid-TermLong Term
TrendsBearishNeutralBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 38
Average target price 374,00 $
Last Close Price 328,99 $
Spread / Highest target 33,7%
Spread / Average Target 13,7%
Spread / Lowest Target -5,16%
EPS Revisions
Managers and Directors
NameTitle
Michael E. Miebach President & Chief Executive Officer
Ajaypal S. Banga Chairman
Edward McLaughlin President-Operations & Technology
Sachin J. Mehra Chief Financial Officer
Steven J. Freiberg Independent Director
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