Mastercard (MA) 10-K risk factor changes: FY2022 vs FY2021

[removed: 24] MASTERCARD [removed: 2021] [added: 2022] FORM 10-K [added: 33]

[added: 34] MASTERCARD [removed: 2021] [added: 2022] FORM 10-K [removed: 25]

[removed: Any of] [added: Should an event occur that triggers] these [removed: developments] [added: obligations, such an event] could materially and adversely affect our overall business and results of operations.

[removed: 26] MASTERCARD [removed: 2021] [added: 2022] FORM 10-K [added: 35]

[removed: The pandemic has affected business activity,] [added: These impacts have continued to] adversely [removed: impacting] [added: impact] consumers, our customers, suppliers and business partners, as well as our workforce.

[removed: Governments, businesses and consumers continue to react to the changing conditions,] [added: Such reactions have included] tightening or loosening safety measures [added: and border restrictions] or voluntarily making personal safety decisions, as applicable, based on the current environment of their location.

[added: 36] MASTERCARD [removed: 2021] [added: 2022] FORM 10-K [removed: 27]

There are no comparable recent events which may provide guidance as to the [removed: effect] [added: future effects] of a global pandemic such as COVID-19, and, as a result, the ultimate impact of this pandemic or a similar health epidemic in the future is [removed: highly] uncertain and subject to change.

The full extent to which the COVID-19 pandemic, and measures taken in response, further impacts our business, results of operations and financial condition will depend on future developments, which are uncertain, including, but not limited to, the duration of the pandemic and its impact on the global economy, including [removed: how quickly and to what] [added: the] extent [added: to which] we can continue to progress toward [added: and maintain] more consistent economic and operating conditions.

Even after the COVID-19 pandemic has subsided, we may continue to experience materially adverse impacts to our business and our [removed: result] [added: results] of operations as a result of its global economic impact, including any recession that has occurred or may occur in the future.

[removed: 28] MASTERCARD [removed: 2021] [added: 2022] FORM 10-K [added: 37]

[removed: These factors] [added: Any of the above issues] could have a material [added: or] adverse impact [removed: on] [added: to] our overall business [removed: and] [added: and/or] results of operations.

[added: 38] MASTERCARD [removed: 2021] [added: 2022] FORM 10-K [removed: 29]

Our failure to effectively design and deliver these multi-rail solutions and integrated products and services could make our other offerings less desirable to [added: these] customers, or put us at a competitive disadvantage.

[removed: 30] MASTERCARD [removed: 2021] [added: 2022] FORM 10-K [added: 39]

[added: In addition, if there is a delay in the implementation of our products or services (which could include compliance obligations, such as AML and CFT, and licensing requirements for our products and services that operate under regulatory licenses), if our products or services do not perform as anticipated, or we are unable to otherwise adequately anticipate] risks related to new types of customers, we could face additional regulatory scrutiny, fines, sanctions or other penalties, which could materially and adversely affect our overall business and results of operations, as well as negatively impact our brand and reputation.

Information Security and [removed: Service Disruptions][added: Operational Resilience]

[removed: The advent of the global COVID-19 pandemic has resulted in a significant rise in these] [added: These] types of threats [added: have risen significantly] due to a significant portion of our workforce working [removed: from home] in a [removed: mostly] remote [added: or hybrid] environment.

[removed: Additionally,] [added: Other] geopolitical events and resulting government activity could also lead to information security threats and attacks by affected [added: or sympathizing] jurisdictions [added: or other actors, which could put our information] and [removed: their sympathizers.][added: assets at risk, as well as result in network disruption.]

In addition, they could lead to damage to our reputation with our [removed: customers and] [added: customers,] other [removed: parties] [added: stakeholders] and the [removed: market,] [added: broader payments ecosystem,] additional costs to us (such as repairing systems, adding new personnel or protection technologies or compliance costs), regulatory penalties, financial losses to both us and our customers and partners and the loss of customers and business opportunities.

Such events could also slow or reverse the [added: trend toward electronic payments.]

Service disruptions that cause us to be unable to process transactions or service our customers could [added: reduce our operational resilience and] materially affect our overall business and results of operations.

Although we maintain [removed: a] [added: an] enterprise resiliency program to analyze risk, assess potential impacts, and develop effective response strategies, we cannot ensure that our business would be immune to these risks, because of the intrinsic importance of our switching systems to our business, any interruption or degradation could adversely affect the perception of the reliability of products carrying our brands and materially adversely affect our overall business and our results of operations.

In the retail industry, there is a set of larger merchants with increasingly global scope and [removed: influence.][added: influence that we believe are having a significant impact on all participants in the global payments industry, including Mastercard.]

[added: *Adverse economic trends.*] Adverse economic trends in key countries in which we operate may adversely affect our financial performance.

[removed: Additionally, we] [added: *Cross-border transactions.* We] switch substantially all cross-border transactions using Mastercard, Maestro and Cirrus-branded cards and generate a significant amount of revenue from cross-border volume fees and fees related to switched transactions.

[removed: As] [added: Moreover, as] governments, investors and other stakeholders face pressure to address climate change and other [removed: sustainability] [added: ESG] matters, these stakeholders may express new [removed: expectations,] [added: expectations and] focus investments [removed: and require additional disclosures] in ways that [added: could] cause significant shifts in commerce and consumption behaviors.

Additionally, any regulation of interregional interchange fees could also negatively impact our cross-border [removed: activity.][added: activity (for example, the targets announced by the G20 Financial Stability Board related to cross-border payments).]

[added: *Standards.*] Our operations as a global payments network rely in part on global interoperable standards to help facilitate safe and simple payments.

During [removed: 2021,] [added: 2022,] approximately [removed: 68%] [added: 67%] of our revenue was generated from activities outside the United States.

[removed: Brand and] [added: Brand,] Reputational [removed: Impact][added: Impact and ESG]

The ability to attract consumers to our branded products and retain them depends upon the external perception of us and our [removed: industry.][added: industry:]

[added: -] Our business may be affected by actions taken by our customers, merchants or other organizations that impact the perception of our brands or the payments industry in general.

Moreover, adverse developments with respect to our industry or the industries of our customers or other companies and organizations that use our products and services (including certain legally permissible but high- risk merchant categories, such as [removed: alcohol, tobacco, firearms and] adult [removed: content)] [added: content, firearms, alcohol and tobacco)] may also, by association, impair our reputation, or result in greater public, regulatory or legislative [removed: scrutiny.][added: scrutiny, as well as potential litigation.]

[added: -] We have [removed: also] been pursuing the use of social media channels at an increasingly rapid pace.

[removed: To] [added: Consumers, investors, employees and other stakeholders are increasingly focused on ESG practices, and to] the extent any of our [removed: published sustainability] [added: ESG disclosures, public statements and] metrics are subsequently viewed as [removed: inaccurate] [added: inaccurate,] or we are unable to execute on our sustainability initiatives, we may be viewed negatively by [removed: consumers, investors and other] stakeholders concerned about these matters.

[removed: Also, as we are headquartered in the United States,] [added: As such,] a negative perception of the United States could impact the perception of our company, which could adversely affect our business.

Any of the above issues could have a material and adverse effect [removed: to] [added: on] our overall business.

We may not be able to [removed: attract, hire] [added: attract] and retain a highly qualified and diverse workforce, or maintain our corporate culture, which could [removed: impact] [added: harm] our [removed: ability to grow effectively.][added: overall business and results of operations.]

The market for [removed: key personnel] [added: specialized skill-sets] is highly competitive, particularly in technology and other [removed: skill] areas [removed: significant] [added: that are important] to [added: the growth of] our business.

In response to U.S. and European sanctions against Russia earlier this year, we saw increased information security threats from state sponsored actors.

These consequences could be further pronounced in jurisdictions in which we are deemed critical national infrastructure.

*Russia’s invasion of Ukraine.* In response to the Russian invasion of Ukraine, the United States, the European Union and other governments imposed sanctions and other restrictive measures on certain Russian-related entities and individuals and we suspended our business operations in Russia.

We have experienced loss of revenue in this fast-growing market as a result of both the implementation of sanctions and the suspension of our business operations, as well as related impacts in Ukraine and throughout the region.

Future developments (including the expansion or extension of the war, future sanctions and/or actions taken by others globally, and other macroeconomic factors) could result in further negative impacts on our business and financial results.

As customers, merchants and other business partners are impacted by the invasion, it can further negatively affect the environment in which we operate.

Moreover, our compliance with sanctions and our decision to suspend business operations has led, and could further lead, to other legal ramifications and operational challenges, including fines, the nationalization of our subsidiary and any resulting impacts, and/or lawsuits.

While conditions related to the global COVID-19 pandemic generally improved in 2022, the pandemic continues to have negative effects on the global economy and has affected business activity, in particular, in areas such as travel and supply chains.

Governments, businesses and consumers continue to react to changing conditions, including the emergence of variants of the virus, the severity of infections on a regional basis and the global administration of vaccines and boosters.

We may also face similar scrutiny to the extent that we are unable to detect and/or prevent illegal activities using our payment products or otherwise occurring over our network.

- We are headquartered in the United States.

ESG matters and related stakeholder reaction may impact our reputation, expose us to legal requirements and liability and/or have other business impacts, which could adversely affect our overall business and/or results of operations.

Our brand and reputation are associated with our public commitments to various ESG initiatives, including our goals relating to climate (e.g., our commitment to achieve net-zero emissions by 2040), financial inclusion, and diversity, equity and inclusion.

These stakeholders may also have a negative view of us to the extent we have been or in the future are perceived to have not responded appropriately to growing concerns with respect to ESG matters or take or do not take positions that are unpopular with them.

In addition, various jurisdictions are increasingly adopting or considering laws and regulations that have or would impact us pertaining to ESG governance, strategy, risk management and metrics/targets.

Regulations already adopted or being considered include required corporate reporting and disclosures on specific topics (such as climate and human rights) as well as broader matters (such as other environmental matters, treatment of employees and diversity of workforce).

These requirements would likely result in increased compliance costs for our business and supply chain, which may increase our operating costs.

The impact of and uncertainty that could result from such shifts could ultimately impact our business.

Our performance largely depends on the talents and efforts of our employees (including our people leaders), as well as the environment we create for them to enable them to perform their jobs effectively.

Our inability to meet candidate demands has led in recent years, and may continue to lead, to an increase in declined offers.

In addition, high inflation has impacted both cost structure and employee demand for wage growth, which may lead to talent attrition.

In the wake of the global COVID-19 pandemic and the influence of work flexibility on candidate decisions, we have adapted our policies and practices to allow for flexible team-driven work arrangements (including both remote and hybrid).

This approach may impact the nature of relationships among our workforce, which in turn could have a negative impact on the quality of our corporate culture and our ability to innovate.

To the extent the arrangements we provide do not meet candidate or employee expectations for flexibility, this could also impact our ability to attract and retain talent.

Failure to attract, hire, develop, motivate and retain highly qualified and diverse employee talent could leave us vulnerable to not anticipating or identifying emerging customer or market opportunities.

We also rely on our people leaders to display integrity and decency.

Any one or more of the above could harm our overall business and results of operations.

Furthermore, we may inherit litigation risk which may increase our post-acquisition costs of operations and impact our ability to successfully finance that business.

may be used, the way we structure and operate our business and the types of consumers and merchants who can obtain or accept our products or services.

New regulations and oversight could also relate to our clearing and settlement activities (including risk management policies and procedures, collateral requirements, participant default policies and procedures, the ability to complete timely switching of financial transactions, and capital and financial resource requirements).

Several jurisdictions have also inquired about the network fees we charge to our customers (typically as part of broader market reviews of retail payments).

In addition, several central banks or similar regulatory bodies around the world have increased, or are seeking to increase, their formal oversight of the electronic payments industry.

In several jurisdictions, we have been designated as a “systemically important payment system”, and other regulators are considering designating us as systemically important or in a similar category resulting in heightened regulatory oversight.

These obligations, designations and restrictions may further expand and could conflict with each other as more jurisdictions impose oversight of payments systems.

Moreover, as regulators around the world increasingly look to replicate similar regulation of payments and other industries, efforts in any one jurisdiction may influence approaches in other jurisdictions.

Similarly, new initiatives within a jurisdiction involving one product may lead to regulation of similar or related products (for example, debit regulations could lead to regulation of credit products).

As a result, the risks to our business created by any one new law or regulation are magnified by the potential it has to be replicated in other jurisdictions or involve other products within any particular jurisdiction.

The expansion of our products and services as part of our multi-rail strategy have also created the need for us to obtain new types and increasing numbers of regulatory licenses, resulting in increased supervision and additional compliance burdens distinct from those imposed on our core network activities.

For example, certain of our subsidiaries maintain money transfer licenses to support certain activities.

These licenses typically impose supervisory and examination requirements, as well as capital, safeguarding, risk management and other business obligations.

Increased regulation and oversight of payments systems, as well as increased exposure to regulation resulting from changes to our products and services, have resulted and may continue to result in costly compliance burdens or otherwise increase our costs.

As a result, issuers, acquirers and other customers could be less willing to participate in our payments system and/or use our other products or services, reduce the benefits offered in connection with the use of our products (making our products less desirable to consumers), reduce the volume of domestic and cross-border transactions or other operational metrics, disintermediate us, impact our profitability and limit our ability to innovate or offer differentiated products and services, all of which could materially and adversely impact our financial performance.

In addition, any regulation that is enacted related to the type and level of network fees we charge our customers could also materially and adversely impact our results of operations.

Regulators could also require us to obtain prior approval for changes to our system rules, procedures or operations, or could require customization with regard to such changes, which could negatively impact us.

Such changes could lead to new or different criteria for participation in and access to our payments system by financial institutions or other customers.

Moreover, failure to comply with the laws and regulations to which we are subject could result in fines, sanctions, civil damages or other penalties, which could materially and adversely affect our overall business and results of operations, as well as have an impact on our brand and reputation.

Increased regulatory, legislative and litigation activity with respect to interchange rates could have an adverse impact on our business.

Interchange rates are a significant component of the costs that merchants pay in connection with the acceptance of our products.

Although we do not earn revenues from interchange, interchange rates can impact the volume of transactions we see on our payment products.

If interchange rates are too high, merchants may stop accepting our products or route transactions away from our network.

If interchange rates are too low, issuers may stop promoting our integrated products and services, eliminate or reduce loyalty rewards programs or other account holder benefits (e.g., free checking or low interest rates on balances), or charge fees to account holders (e.g., annual fees or late payment fees).

Governments and merchant groups in a number of countries have implemented or are seeking interchange rate reductions through legislation, competition law, central bank regulation and litigation.

See “Business - Government Regulation” in Part I, Item 1 and Note 21 (Legal and Regulatory Proceedings) to the consolidated financial statements included in Part II, Item 8 for more details.

If issuers cannot collect or we are required to reduce interchange rates, issuers may be less willing to participate in our four-party payments system, or may reduce the benefits offered in connection with the use of our products, reducing the attractiveness of our products to consumers.

These and other impacts could lower transaction volumes, and/or make proprietary three-party networks or other forms of payment more attractive.

Issuers could reduce the benefits associated with our products or choose to charge higher fees to consumers to attempt to recoup a portion of the costs incurred for their services.

In addition, issuers could seek a fee reduction from us to decrease the expense of their payment programs, particularly if regulation has a disproportionate impact on us as compared to our competitors in terms of the fees we can charge.

This could make our products less desirable to consumers, reduce the volume of transactions and our profitability, and limit our ability to innovate or offer differentiated products.

PART I

ITEM 1A.

RISK FACTORS

We are devoting substantial resources to defending our right to establish interchange rates in regulatory proceedings, litigation and legislative activity.

The potential outcome of any of these activities could have a more positive or negative impact on us relative to our competitors.

If we are ultimately unsuccessful in defending our ability to establish interchange rates, any resulting legislation, regulation and/or litigation may have a material adverse impact on our overall business and results of operations.

In addition, regulatory proceedings and litigation could result (and in some cases has resulted) in us being fined and/or having to pay civil damages, the amount of which could be material.

Limitations on our ability to restrict merchant surcharging could materially and adversely impact our results of operations.

We have historically implemented policies, referred to as no-surcharge rules, in certain jurisdictions, including the United States, that prohibit merchants from charging higher prices to consumers who pay using our products instead of other means.

Authorities in several jurisdictions have acted to end or limit the application of these no-surcharge rules (or indicated interest in doing so).

| | | | | | | Operational | | | | | | | | | | | | [removed: Special Items 1] [added: Acquisitions] | | | | | | | | | | | | [removed: Acquisitions] [added: Currency Impact 3] | | | | | | | | | | | | [removed: Currency Impact 2] | | | | | | [added: Special Items 4] | | | | | | [added: | | | | | |] Total | | | | | | | | | [added: | | | | | |]

| | | | | | | [removed: 2021 | | | | | | 2020 | | | | | | 2021 | | | | | | 2020] [added: 2022] | | | | | | 2021 | | | | | | 2020 | | | | | | [removed: 2021 | | | | | | 2020] [added: 2022] | | | | | | 2021 | | | [removed: | | | 2020 | | |]

| General and administrative | | | | | | [removed: 11%] [added: 13%] | | | | | | [removed: (1)] [added: 11] | | % | | | | [removed: 1] [added: 4] | | % | | | | [added: 6] | | [added: %] | | | | [removed: 6] [added: (3)] | | % | | | | [removed: 4] [added: 2] | | % | | | | [removed: 2] [added: —] | | % | | | | [removed: —] [added: 1] | | % | | | | [removed: 20] [added: 14] | | % | | | | [removed: 3] [added: 20] | | % |

| Advertising and marketing | | | | | | [removed: 35%] [added: (9)%] | | | | | | [removed: (30)] [added: 35] | | % | | | | [added: 1] | | [added: %] | | | | [added: 1] | | [added: %] | | | | [removed: 1] [added: (4)] | | % | | | | [removed: —] [added: 1] | | % | | | | [removed: 1] | | [removed: %] | | | | [removed: (1)] | | [removed: %] | | | | [removed: 36] [added: (12)] | | % | | | | [removed: (30)] [added: 36] | | % |

| Depreciation and amortization | | | | | | [removed: 3%] [added: (1)%] | | | | | | [removed: 5] [added: 3] | | % | | | | [added: 8] | | [added: %] | | | | [added: 20] | | [added: %] | | | | [removed: 20] [added: (4)] | | % | | | | [removed: 6] [added: 2] | | % | | | | [removed: 2] | | [removed: %] | | | | [removed: —] | | [removed: %] | | | | [removed: 25] [added: 3] | | % | | | | [removed: 11] [added: 25] | | % |

| Total operating expenses | | | | | | [removed: 12%] [added: 10%] | | | | | | [removed: (5)] [added: 12] | | % | | | | [removed: 1] [added: 4] | | % | | | | [removed: 1] [added: 7] | | % | | | | [removed: 7] [added: (3)] | | % | | | | [removed: 4] [added: 2] | | % | | | | [removed: 2] [added: 3] | | % | | | | [removed: —] [added: 1] | | % | | | | [removed: 22] [added: 13] | | % | | | | [removed: —] [added: 22] | | % |

[removed: 2Represents] [added: 1Represents] the translational and transactional impact of currency.

General and administrative expenses increased [removed: 20%,] [added: 14%,] or [removed: 18%] [added: 17%] on a currency-neutral basis, in [removed: 2021] [added: 2022] versus the prior year.

Current year results include growth of [removed: 6] [added: 4] percentage points from [removed: acquisitions and 1 percentage point from Special Items.][added: acquisitions.]

The remaining increase was primarily due to higher personnel costs to support our continued investment in our strategic initiatives [added: across payments, services] and [added: new networks,] increased [removed: data processing costs.][added: travel and meeting costs and balance sheet remeasurement losses due to unfavorable foreign exchange activity.]

| | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | |

| Personnel [added: 1] | | | | | | $ | [removed: 4,489] [added: 5,263] | | | | | $ | [removed: 3,787] [added: 4,489] | | | | | $ | [removed: 3,537] [added: 3,787] | | | | | [removed: 19%] [added: 17%] | | | | | | [removed: 7%] [added: 19%] | | |

| Professional fees | | | | | | [removed: 433] [added: 480] | | | | | | [removed: 384] [added: 433] | | | | | | [removed: 447] [added: 384] | | | | | | [removed: 13%] [added: 11%] | | | | | | [removed: (14)%] [added: 13%] | | |

| Data processing and telecommunications | | | | | | [removed: 898] [added: 926] | | | | | | [removed: 756] [added: 898] | | | | | | [removed: 666] [added: 756] | | | | | | [removed: 19%] [added: 3%] | | | | | | [removed: 14%] [added: 19%] | | |

| Foreign exchange activity [removed: 1] [added: 2] | | | | | | [removed: 51] [added: 102] | | | | | | [removed: 9] [added: 51] | | | | | | [removed: 32] [added: 9] | | | | | | | | | | | | | | |

| Other [removed: 2] [added: 1, 3] | | | | | | [removed: 1,216] [added: 1,307] | | | | | | [removed: 974] [added: 1,216] | | | | | | [removed: 1,081] [added: 974] | | | | | | [removed: 25%] [added: 7%] | | | | | | [removed: (10)%] [added: 25%] | | |

| Total general and administrative expenses | | | | | | $ | [removed: 7,087] [added: 8,078] | | | | | $ | [removed: 5,910] [added: 7,087] | | | | | $ | [removed: 5,763] [added: 5,910] | | | | | [removed: 20%] [added: 14%] | | | | | | [removed: 3%] [added: 20%] | | |

[removed: 1Foreign] [added: 2 Foreign] exchange activity includes [removed: gains and losses on foreign exchange derivative contracts and] the impact of remeasurement of assets and liabilities denominated in foreign [removed: currencies.][added: currencies net of the impact of gains and losses on foreign exchange derivative contracts.]

[removed: 2] [added: 3] Includes a [removed: special item] [added: Special Item] related to a foreign indirect tax matter of $82 [removed: million, pre-tax, recorded during] [added: million for the year ended December 31,] 2021.

Depreciation and amortization expenses increased [removed: 25%,] [added: 3%,] or [removed: 23%] [added: 7%] on a currency-neutral basis, in [removed: 2021] [added: 2022] versus the prior year, [removed: which includes growth of 20 percentage points from acquisitions] due to the amortization of acquired intangible [removed: assets.][added: assets from acquisitions.]

In [added: 2022,] 2021 and 2020, we recorded [added: $356 million,] $94 million and $73 million, respectively, related to various [removed: litigation settlements and] legal [removed: costs.][added: proceedings.]

See [added: “Non-GAAP Financial Information” in this section and] Note 21 (Legal and Regulatory Proceedings) to the consolidated financial statements included in Part II, Item 8 for further discussion.

MASTERCARD [removed: 2021] [added: 2022] FORM 10-K [removed: 53][added: 54]

Other income (expense) was [removed: favorable $546] [added: unfavorable $757] million in [removed: 2021] [added: 2022] versus the prior year, primarily due to [removed: higher] net [removed: gains] [added: losses] in the current [removed: period] [added: year] versus [added: net gains in] the prior [removed: period] [added: year] related to unrealized fair market value adjustments on marketable and nonmarketable equity securities and realized gains on sales of marketable equity [removed: securities.][added: securities in 2021.]

Adjusted other income (expense) was [removed: unfavorable $62] [added: favorable $26] million versus the prior year, primarily due to [added: an increase in our investment income, partially offset by] increased interest expense related to our [removed: recent] [added: 2022] debt [removed: issuances and a decrease in our investment income.][added: issuances.]

| Investment [removed: Income] [added: income] | | | | | | $ | [removed: 11] [added: 61] | | | | | $ | [removed: 24] [added: 11] | | | | | $ | [removed: 97] [added: 24] | | | | | [removed: (52)] | | [removed: %] | | | | [removed: (75)] [added: (52)] | | % |

| Gains (losses) on equity investments, net | | | | | | [removed: 645] [added: (145)] | | | | | | [removed: 30] [added: 645] | | | | | | [removed: 167] [added: 30] | | | | | | | | | | | | | | |

| Interest expense | | | | | | [removed: (431)] [added: (471)] | | | | | | [removed: (380)] [added: (431)] | | | | | | [removed: (224)] [added: (380)] | | | | | | [removed: 13] [added: 9] | | % | | | | [removed: 70] [added: 13] | | % |

| Other income (expense), net | | | | | | [removed: —] [added: 23] | | | | | | [removed: 5] [added: —] | | | | | | [removed: 27] [added: 5] | | | | | | | | | | | | | | |

| Total other income (expense) | | | | | | [removed: 225] [added: (532)] | | | | | | [removed: (321)] [added: 225] | | | | | | [removed: 67] [added: (321)] | | | | | | | | | | | | | | |

| (Gains) losses on equity investments 1 | | | | | | [removed: (645)] [added: 145] | | | | | | [removed: (30)] [added: (645)] | | | | | | [removed: (167)] [added: (30)] | | | | | | | | | | | | | | |

| Special Items 1 | | | | | | [removed: 6] [added: —] | | | | | | [removed: —] [added: 6] | | | | | | — | | | | | | | | | | | | | | |

| Adjusted total other income (expense) 1 | | | | | | $ | [removed: (413)] [added: (387)] | | | | | $ | [removed: (351)] [added: (413)] | | | | | $ | [removed: (100)] [added: (351)] | | | | | [removed: 18] [added: (6)] | | % | | | | [added: 18] | | [added: %] |

The effective income tax rates for the years ended December 31, [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] were [removed: 15.7%] [added: 15.4%] and [removed: 17.4%,] [added: 15.7%,] respectively.

The adjusted effective income tax rates for the years ended December 31, [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] were [removed: 15.4%] [added: 15.7%] and [removed: 17.2%,] [added: 15.4%,] respectively.

[removed: Both the as reported and as adjusted effective income tax rates in 2021 were lower than the prior year, primarily due to] [added: -] the recognition of U.S. tax [removed: benefits, the] [added: benefits in 2021 (the] majority of which were [removed: discrete,] [added: discrete)] resulting from a higher foreign derived intangible income deduction and greater utilization of foreign tax credits in the U.S. [removed: In addition, a more favorable geographic mix of earnings in 2021 contributed to our lower effective tax rates.]

| | | | | | | [added: 2022 | | | | | |] 2021 | | | | | | 2020 | | | [added: | | | 2022 | | | | | | 2021 | | |]

| Cash, cash equivalents and investments 1 | | | | | | $ | [removed: 7.9] [added: 7.4] | | | | | $ | [removed: 10.6] [added: 7.9] | |

| Unused line of credit | | | | | | [removed: 6.0] [added: 8.0] | | | | | | 6.0 | | |

This amount excludes restricted cash and restricted cash equivalents of [removed: $2.5] [added: $2.2] billion and [removed: $2.3] [added: $2.5] billion at December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] respectively.

Net revenue from our payment network increased 21%, or 20% on a currency-neutral basis, in 2021 versus 2020.

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 include $10,476 million of rebates and incentives provided to customers, which increased 31%, or 30% on a currency-neutral basis, in 2021 versus 2020, primarily due to an increase in our key drivers as well as new and renewed deals.

Net revenue from our value-added services and solutions increased 28%, or 27% on a currency-neutral basis, in 2021 versus 2020, which includes a 6 percentage point increase from acquisitions.

The remaining increase was primarily driven by our cyber and intelligence and data and services solutions.

See Note 3 (Revenue) to the consolidated financial statements included in Part II, Item 8 for a further discussion of how we recognize revenue.

Drivers of Change

The following table summarizes the drivers of change in net revenue:

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | For the Years Ended December 31, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | 2022 | | | | | | 2021 | | | | | | 2022 | | | | | | 2021 | | | | | | 2022 | | | | | | 2021 | | | | | | | | | | | | | | | | | | 2022 | | | | | | 2021 | | | | | | 2022 | | | | | | 2021 | | |

| Payment network | | | | | | 26% | | | 1 | | | 20% | | | 1 | | | —% | | | | | | —% | | | | | | (6)% | | | | | | 1% | | | | | | | | | | | | | | | | | | —% | | | | | | —% | | | | | | 20 | | % | | | | 21 | | % |

| Value-added services and solutions | | | | | | 15% | | | 2 | | | 21% | | | 2 | | | 4% | | | | | | 6% | | | | | | (4)% | | | | | | 1% | | | | | | | | | | | | | | | | | | | | | | | | —% | | | | | | 14 | | % | | | | 28 | | % |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Net revenue | | | | | | 22% | | | | | | 20% | | | | | | 1% | | | | | | 2% | | | | | | (5)% | | | | | | 1% | | | | | | | | | | | | | | | | | | —% | | | | | | —% | | | | | | 18 | | % | | | | 23 | | % |

Note: Table may not sum due to rounding

1Includes impacts from our key drivers and metrics, offset by rebates and incentives.

2 Includes impacts from cyber and intelligence, data and services, processing and gateway, ACH batch and real-time account-based domestic and cross-border payments and solutions, opening banking and digital identity, offset by rebates and incentives.

3 Includes the translational and transactional impact of currency and the related impact of our foreign exchange derivative contracts designated as cash flow hedging instruments.

4 See “Non-GAAP Financial Information” for further information on our non-GAAP adjustments and the reconciliation to GAAP reported amounts.

No individual country, other than the United States, generated more than 10% of net revenue in any such period.

A significant portion of our net revenue is concentrated among our five largest customers.

In 2022, the net revenue from these customers was approximately $4.7 billion, or 21%, of total net revenue.

The loss of any of these customers or their significant card programs could adversely impact our revenue.

Operating Expenses

Operating expenses increased 13% in 2022 versus the prior year.

Adjusted operating expenses increased 11%, or 14% on a currency-neutral basis, versus the prior year, which includes a 4 percentage point increase from acquisitions.

The remaining increase was primarily due to higher personnel costs, travel and meeting costs and unfavorable foreign exchange activity.

The components of operating expenses were as follows:

| General and administrative | | | | | | $ | 8,078 | | | | | $ | 7,087 | | | | | $ | 5,910 | | | | | 14 | | % | | | | 20 | | % |

| Advertising and marketing | | | | | | 789 | | | | | | 895 | | | | | | 657 | | | | | | (12) | | % | | | | 36 | | % |

| Depreciation and amortization | | | | | | 750 | | | | | | 726 | | | | | | 580 | | | | | | 3 | | % | | | | 25 | | % |

| Provision for litigation | | | | | | 356 | | | | | | 94 | | | | | | 73 | | | | | | | | | | | | | | |

| Total operating expenses | | | | | | 9,973 | | | | | | 8,802 | | | | | | 7,220 | | | | | | 13 | | % | | | | 22 | | % |

| Special Items 1 | | | | | | (423) | | | | | | (176) | | | | | | (73) | | | | | | | | | | | | | | |

| Adjusted operating expenses (excluding Special Items 1) | | | | | | $ | 9,549 | | | | | $ | 8,627 | | | | | $ | 7,147 | | | | | 11 | | % | | | | 21 | | % |

| | | | | | | Operational | | | | | | | | | | | | Acquisitions | | | | | | | | | | | | Currency Impact 1 | | | | | | | | | | | | Special Items 2 | | | | | | | | | | | | Total | | | | | | | | |

Advertising and marketing expenses increased 36%, on both an as reported and currency-neutral basis, in 2021 versus the prior year, primarily due to an increase in spending on certain marketing campaigns and an increase in advertising and sponsorship spend driven by the reinstatement of sponsored events as the effects of the pandemic recede.

These benefits were partially offset by a lower discrete tax benefit related to share-based payments in 2021.

however, historical trends may not be an indication of potential future losses.

In March 2021, we issued $600 million principal amount of notes due March 2031 and $700 million principal amount of notes due March 2051 and in November 2021, we issued $750 million principal amount of notes due November 2031 (collectively the “2021 USD Notes”).

Additionally, during 2021, $650 million of principal related to the 2016 USD Notes was redeemed.

The proceeds of the 2021 USD Notes due March 2031 are to be used to fund eligible green and social projects, examples of which are described in the Use of Proceeds section of the Prospectus Supplement filed on March 4, 2021.

All other notes are to be used for general corporate purposes.

| Shares repurchased in 2021 | | | | | | 16.5 | | |

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The effect of a hypothetical 10% adverse change in the value of the functional currencies could result in a fair value loss of approximately [removed: $70] [added: $94] million and [removed: $58] [added: $70] million on our foreign exchange derivative contracts outstanding at December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] respectively, before considering the offsetting effect of the underlying hedged activity.

The effect of a hypothetical 10% adverse change in the value of the functional currencies [removed: could result in] [added: would not have] a [added: material impact to the] fair value [removed: loss] of [removed: approximately $1 million and $23 million on] our short duration foreign exchange derivative contracts outstanding at December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] respectively.

We are further exposed to foreign exchange rate risk related to translation of our [added: net investment in] foreign [removed: operating results] [added: subsidiaries] where the functional currency is different than our U.S. dollar reporting currency.

The effect of a hypothetical 10% adverse change in the value of the U.S. dollar could result in a fair value loss of approximately [added: $203 million and] $165 million on our foreign exchange derivative contracts designated as a net investment hedge at December 31, [added: 2022 and] 2021, [added: respectively,] before considering the offsetting effect of the underlying hedged activity.

A hypothetical 100 basis point adverse change in interest rates would not have a material impact to the fair value of our investments at December 31, [removed: 2021] [added: 2022] and [removed: 2020.][added: 2021.]

The effect of a hypothetical 100 basis point adverse change in interest rates could result in a fair value loss of [added: approximately $36 million and] $49 million on our interest rate derivative contracts designated as a fair value hedge of our fixed-rate debt at December 31, [added: 2022 and] 2021, [added: respectively,] before considering the offsetting effect of the underlying hedged activity.

[removed: 58] MASTERCARD [removed: 2021] [added: 2022] FORM 10-K [added: 60]

ITEM [removed: 8.][added: 7A.]

| As of December 31, [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] and for the years ended December 31, [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019] [added: 2020] | | | | | | | | | | | |

| | | | [Management’s report on internal control over financial [removed: reporting](#ifc9293bf99c744279400f5fac9866383_82)] [added: reporting](#ief7e67cb5fe84c30b59c87b2d0fbc770_82)] | | | | | | [removed: [60](#ifc9293bf99c744279400f5fac9866383_82)] [added: [63](#ief7e67cb5fe84c30b59c87b2d0fbc770_82)] | | |

| | | | [Report of independent registered public accounting [removed: firm](#ifc9293bf99c744279400f5fac9866383_85)] [added: firm](#ief7e67cb5fe84c30b59c87b2d0fbc770_85)] (PCAOB ID 238) | | | | | | [removed: [61](#ifc9293bf99c744279400f5fac9866383_85)] [added: [64](#ief7e67cb5fe84c30b59c87b2d0fbc770_85)] | | |

| | | | [Consolidated Statement of [removed: Operations](#ifc9293bf99c744279400f5fac9866383_88)] [added: Operations](#ief7e67cb5fe84c30b59c87b2d0fbc770_88)] | | | | | | [removed: [63](#ifc9293bf99c744279400f5fac9866383_88)] [added: [66](#ief7e67cb5fe84c30b59c87b2d0fbc770_88)] | | |

| | | | [Consolidated Statement of Comprehensive [removed: Income](#ifc9293bf99c744279400f5fac9866383_91)] [added: Income](#ief7e67cb5fe84c30b59c87b2d0fbc770_91)] | | | | | | [removed: [64](#ifc9293bf99c744279400f5fac9866383_91)] [added: [67](#ief7e67cb5fe84c30b59c87b2d0fbc770_91)] | | |

| | | | [Consolidated Balance [removed: Sheet](#ifc9293bf99c744279400f5fac9866383_94)] [added: Sheet](#ief7e67cb5fe84c30b59c87b2d0fbc770_94)] | | | | | | [removed: [65](#ifc9293bf99c744279400f5fac9866383_94)] [added: [68](#ief7e67cb5fe84c30b59c87b2d0fbc770_94)] | | |

| | | | [Consolidated Statement of Changes in [removed: Equity](#ifc9293bf99c744279400f5fac9866383_97)] [added: Equity](#ief7e67cb5fe84c30b59c87b2d0fbc770_97)] | | | | | | [removed: [66](#ifc9293bf99c744279400f5fac9866383_97)] [added: [69](#ief7e67cb5fe84c30b59c87b2d0fbc770_97)] | | |

| | | | [Consolidated Statement of Cash [removed: Flows](#ifc9293bf99c744279400f5fac9866383_100)] [added: Flows](#ief7e67cb5fe84c30b59c87b2d0fbc770_100)] | | | | | | [removed: [68](#ifc9293bf99c744279400f5fac9866383_100)] [added: [71](#ief7e67cb5fe84c30b59c87b2d0fbc770_100)] | | |

| | | | [Notes to consolidated financial [removed: statements](#ifc9293bf99c744279400f5fac9866383_103)] [added: statements](#ief7e67cb5fe84c30b59c87b2d0fbc770_103)] | | | | | | [removed: [69](#ifc9293bf99c744279400f5fac9866383_103)] [added: [72](#ief7e67cb5fe84c30b59c87b2d0fbc770_103)] | | |

[added: 61] MASTERCARD [removed: 2021] [added: 2022] FORM 10-K [removed: 59]

As required by Section 404 of the Sarbanes-Oxley Act of 2002, management has assessed the effectiveness of Mastercard’s internal control over financial reporting as of December 31, [removed: 2021.][added: 2022.]

Management has concluded that, based on its assessment, Mastercard’s internal control over financial reporting was effective as of December 31, [removed: 2021.][added: 2022.]

The effectiveness of Mastercard’s internal control over financial reporting as of December 31, [removed: 2021] [added: 2022] has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears on the next page.

[removed: 60] MASTERCARD [removed: 2021] [added: 2022] FORM 10-K [added: 62]

We have audited the accompanying consolidated balance sheet of Mastercard Incorporated and its subsidiaries (the “Company”) as of December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] and the related consolidated statements of operations, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, [removed: 2021,] [added: 2022,] including the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company’s internal control over financial reporting as of December 31, [removed: 2021,] [added: 2022,] based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2021] [added: 2022] in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2021,] [added: 2022,] based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

[added: 63] MASTERCARD [removed: 2021] [added: 2022] FORM 10-K [removed: 61]

As described in Notes 1 and 3 to the consolidated financial statements, the Company provides certain customers with rebates and incentives which [removed: totaled $11.0] [added: are a portion of total net revenue of $22.2] billion for the year ended December 31, [removed: 2021.][added: 2022.]

The Company has business agreements with certain customers that provide for rebates and incentives [added: within net revenue] that could be either fixed or [removed: variable-based.][added: variable.]

Variable rebates and incentives are recorded [removed: as a reduction of gross revenue] primarily when volume- and transaction-based revenues are recognized over the contractual term.

[removed: 62] MASTERCARD [removed: 2021] [added: 2022] FORM 10-K [added: 64]

| | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Net Revenue | | | | | | $ | [removed: 18,884] [added: 22,237] | | | | | $ | [removed: 15,301] [added: 18,884] | | | | | $ | [removed: 16,883] [added: 15,301] | |

| General and administrative | | | | | | [removed: 7,087] [added: 8,078] | | | | | | [removed: 5,910] [added: 7,087] | | | | | | [removed: 5,763] [added: 5,910] | | |

| Advertising and marketing | | | | | | [removed: 895] [added: 789] | | | | | | [removed: 657] [added: 895] | | | | | | [removed: 934] [added: 657] | | |

| Depreciation and amortization | | | | | | [removed: 726] [added: 750] | | | | | | [removed: 580] [added: 726] | | | | | | [removed: 522] [added: 580] | | |

| Provision for litigation | | | | | | [removed: 94] [added: 356] | | | | | | [removed: 73] [added: 94] | | | | | | [removed: —] [added: 73] | | |

| Total operating expenses | | | | | | [removed: 8,802] [added: 9,973] | | | | | | [removed: 7,220] [added: 8,802] | | | | | | [removed: 7,219] [added: 7,220] | | |

| Operating income | | | | | | [removed: 10,082] [added: 12,264] | | | | | | [removed: 8,081] [added: 10,082] | | | | | | [removed: 9,664] [added: 8,081] | | |

| Investment income | | | | | | [removed: 11] [added: 61] | | | | | | [removed: 24] [added: 11] | | | | | | [removed: 97] [added: 24] | | |

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

February 14, 2023

| Short-term debt | | | | | | 274 | | | | | | 792 | | |

| Balance at December 31, 2021 | | | | | | — | | | | | | — | | | | | | 5,061 | | | | | | (42,588) | | | | | | 45,648 | | | | | | (809) | | | | | | 7,312 | | | | | | 71 | | | | | | 7,383 | | |

| Dividends | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (1,968) | | | | | | — | | | | | | (1,968) | | | | | | — | | | | | | (1,968) | | |

| Balance at December 31, 2022 | | | | | | $ | — | | | | | $ | — | | | | | $ | 5,298 | | | | | $ | (51,354) | | | | | $ | 53,607 | | | | | $ | (1,253) | | | | | $ | 6,298 | | | | | $ | 58 | | | | | $ | 6,356 | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Depreciation and amortization | | | | | | 750 | | | | | | 726 | | | | | | 580 | | |

Mastercard Incorporated and its consolidated subsidiaries, including Mastercard International Incorporated (“Mastercard International” and together with Mastercard Incorporated, “Mastercard” or the “Company”), is a technology company in the global payments industry.

The Company’s investments in new networks, such as open banking solutions and digital identity capabilities, support and strengthen our payments and services solutions.

During 2022, the Company updated its disaggregated net revenue presentation by category and geography to reflect the nature of its payment services and to align such information with the way in which management will prospectively view its categories of net revenue.

Prior period amounts have been reclassified to conform to the 2022 presentation.

The reclassification had no impact on previously reported total net revenue, operating income or net income.

Revenue from the Company’s value-added services and solutions is generated through either fixed or transaction-based fees.

These services and solutions can be integrated and sold with the Company’s payment network services or can be sold on a stand-alone basis.

Deferred revenue primarily relates to certain value-added services and solutions.

*Goodwill and other intangible assets* - Indefinite-lived intangible assets consist of goodwill and customer relationships.

If the fair value of the reporting unit

For those transactions the Company guarantees, the guarantee will cover the full amount of the settlement obligation to the extent the settlement obligation is not otherwise satisfied.

Settlement is generally completed on a same-day basis, however, in some circumstances, funds may not settle until subsequent business days creating a short-term settlement exposure.

guarantees, are not recorded on the consolidated balance sheet.

The amount of these security deposits and the duration held are determined by the risk profile of the individual customer and the Company’s risk management practices.

Any gains and losses deferred in accumulated other

reasonably certain that the Company will exercise that option.

stock units using the treasury stock method.

On April 1, 2022, Mastercard acquired a 100% equity interest in Dynamic Yield LTD (“Dynamic Yield”) for cash consideration of $325 million.

The Company’s preliminary estimate of net assets acquired has been recorded primarily as intangible assets, including goodwill of $200 million that is primarily attributable to the synergies expected to arise after the acquisition date.

None of the goodwill is expected to be deductible for local tax purposes.

The Company is evaluating and finalizing the purchase accounting for Dynamic Yield.

Mastercard is a payments network service provider that generates revenue from a wide range of payment solutions provided to customers.

The Company disaggregates its net revenue from contracts with customers into two categories: (i) payment network and (ii) value-added services and solutions.

The Company’s net revenue categories, payment network and value-added services and solutions, are recognized net of rebates and incentives provided to customers.

Payment network

As a payments network service provider, the Company provides its

customers with continuous access to its global payments network and stands ready to provide transaction processing over the contractual term.

Value-added services and solutions

The Company generates revenues from value-added services and solutions through either fixed or transaction-based fees.

These services and solutions can be integrated and sold with the Company’s payment network services or can be sold on a stand-alone basis.

These services and solutions primarily include cyber and intelligence, data and services, processing and gateway, ACH batch and real-time account-based payments and solutions, open banking and digital identity.

| Revenue by category: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

We did not have similar foreign exchange derivative contracts outstanding as of December 31, 2020.

We did not have similar interest rate derivative contracts outstanding as of December 31, 2020.

PART II

February 11, 2022

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Current portion of long-term debt | | | | | | 792 | | | | | | 649 | | |

| Balance at December 31, 2018 | | | | | | $ | — | | | | | $ | — | | | | | $ | 4,580 | | | | | $ | (25,750) | | | | | $ | 27,283 | | | | | $ | (718) | | | | | $ | 5,395 | | | | | $ | 23 | | | | | $ | 5,418 | |

| Dividends | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (1,408) | | | | | | — | | | | | | (1,408) | | | | | | — | | | | | | (1,408) | | |

| Balance at December 31, 2020 | | | | | | — | | | | | | — | | | | | | 4,982 | | | | | | (36,658) | | | | | | 38,747 | | | | | | (680) | | | | | | 6,391 | | | | | | 97 | | | | | | 6,488 | | |

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Volume-based revenue (domestic assessments and cross-border volume fees) is recorded as revenue in the period it is earned, which is primarily based on the related volume generated on the cards.

Deferred revenue is primarily derived from data analytic and consulting services.

While the term and amount of the guarantee are unlimited, the duration of settlement exposure is short term and typically limited to a few days.

These security deposits are typically held for the duration of the agreement with the customers.

Accounting pronouncements not yet adopted

*Accounting for contract assets and contract liabilities in a business combination* - In October 2021, the Financial Accounting Standards Board issued accounting guidance that requires contract assets and contract liabilities (i.e., deferred revenue) acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, *Revenue from Contracts with Customers*.

The guidance is effective for periods beginning after December 15, 2022 with early adoption permitted.

The Company will early adopt this guidance effective January 1, 2022 and does not expect the impacts to be material.

In 2021, the Company finalized the purchase accounting for businesses acquired during 2020.

Pending Acquisition

As of December 31, 2021, Mastercard has entered into a definitive agreement to acquire Dynamic Yield LTD. This acquisition is expected to close in the second quarter of 2022.

Revenue recognized from domestic assessments, cross-border volume fees and transaction processing are derived from Mastercard’s payments network services.

Revenue is generally derived from information accumulated by Mastercard’s systems or reported by customers.

The price structure for Mastercard’s products and services is dependent on the nature of volumes, types of transactions and type of products and services offered to customers.

Net revenue can be impacted by the following:

- domestic or cross-border transactions

- geographic region or country in which the transaction occurs

- volumes/transactions subject to tiered rates

- switched or not switched by the Company

- amount of usage of the Company’s other products or services

- amount of rebates and incentives provided to customers

The Company classifies its net revenue into the following five categories:

Domestic assessments are fees charged to issuers and acquirers based primarily on the dollar volume of activity on cards and other devices that carry the Company’s brands where the merchant country and the country of issuance are the same.

Revenue from domestic assessments is recorded as revenue in the period it is earned, which is when the related volume is generated on the cards or other devices that carry the Company’s brands.

Cross-border volume fees are charged to issuers and acquirers based primarily on the dollar volume of activity on cards and other devices that carry the Company’s brands where the merchant country and the country of issuance are different.

Revenue from cross-border volume is recorded as revenue in the period it is earned, which is when the related volume is generated on the cards or other devices that carry the Company’s brands.

Transaction processing includes the following:

- *Switched transaction* revenue is generated from the following products and services:

◦Authorization, which is the process by which a transaction is routed to the issuer for approval.

[added: We have implemented a comprehensive AML/CFT program, comprised of policies, procedures and internal controls, including the designation of a compliance officer, which is designed to prevent our payments] network from being used to facilitate money laundering and other illicit activity and to address these legal and regulatory requirements and assist in managing money laundering and terrorist financing risks.

The economic sanctions programs administered by OFAC restrict financial transactions and other dealings with certain countries and geographies (specifically Crimea, [added: the Donetsk People’s Republic and Luhansk People’s Republic regions of Ukraine,] Cuba, Iran, North Korea and Syria) and with persons and entities included in OFAC sanctions lists including its list of Specially Designated Nationals and Blocked Persons (the “SDN List”).

In addition, we are or may be subject to regulation by a number of agencies charged with oversight of, among other things, consumer protection, [added: cybersecurity,] financial and banking matters.

We may also be impacted by evolving laws surrounding gambling, including fantasy sports, as well as certain legally permissible but high-risk merchant categories, such as [removed: alcohol, tobacco, firearms and] adult [removed: content.][added: content, firearms, alcohol and tobacco.]

A number of regulators and policymakers around the globe are using the GDPR as a reference to adopt new or updated privacy and data protection [removed: laws, including in the U.S. (California, Virginia and Colorado), Argentina, Brazil, Canada (Quebec), Chile, China, India, Indonesia, Kenya and Saudi Arabia.][added: laws.]

Additional Regulatory Developments. Various regulatory agencies also continue to examine a wide variety of issues that could impact us, including evolving laws surrounding [added: buy-now-pay-later, digital currencies,] marijuana, prepaid payroll cards, [removed: virtual currencies,] identity theft, account management guidelines, disclosure rules, security and marketing that would impact our customers directly.

[removed: 22] [added: 24] MASTERCARD [removed: 2021] [added: 2022] FORM 10-K

The information contained on our corporate website, including, but not limited to, our [added: Corporate] Sustainability Report, our Global Inclusion Report and our U.S. Consolidated EEO-1 Report, is not incorporated by reference into this Report.

| | | | [removed: Payments Industry] [added: Other] Regulation | | | | | | | | | | | | [removed: COVID-19] [added: Global Economic and Political Environment] | | | | | | [removed: Global Economic] [added: Settlement] and [removed: Political Environment] [added: Third-Party Obligations] | | | | | |

| | | | [removed: Preferential or Protective Government Actions] [added: Payments Industry Regulation] | | | | | | | | | | | | Competition and Technology | | | | | | [removed: Brand and] [added: Brand,] Reputational Impact [added: and ESG] | | | | | |

[removed: | | | | Privacy,] [added: Privacy,] Data and [removed: Security | | | | | | | | | | | | Information Security and Service Disruptions | | | | | | Talent and Culture | | | | | |][added: Security]

[removed: | | | | Other Regulation | | | | | | | | | | | | Stakeholder Relationships | | | | | | Acquisitions | | | | | |][added: Other Regulation]

| | | | [removed: Class A Common Stock and Governance Structure] | | | | | | | | | [added: Class A Common Stock and Governance Structure] | | | | | | | | | | | | | | |

[removed: Many jurisdictions have enacted such regulations, establishing,] [added: These efforts established,] and potentially further [removed: expanding,] [added: expand,] obligations or restrictions with respect to the types of products and services that we may offer, the countries in which our integrated products and services [added: may be used, the way we structure and operate our business and the types of consumers and merchants who can obtain or accept our products or services.]

MASTERCARD [removed: 2021] [added: 2022] FORM 10-K [removed: 23][added: 25]

Various forms of data localization requirements or data transfer restrictions are also under consideration in other countries and jurisdictions, including the European Union.

Anti-Money Laundering, Counter Financing of Terrorism, Economic Sanctions and Anti-Corruption. We are subject to anti-money laundering (“AML”) and counter-financing of terrorism (“CFT”) laws and regulations globally, including the U.S. Bank Secrecy Act and the USA PATRIOT Act, as well as the various economic sanctions programs, including those imposed and administered by the U.S. Office of Foreign Assets Control (“OFAC”).

ESG. Various jurisdictions have adopted or are increasingly considering adopting laws and regulations impacting our reporting on ESG governance, strategy, risk management and metrics and targets.

Regulations already adopted or being considered include required corporate reporting and disclosures on specific topics as well as broader ESG matters.

Specific topics include climate (such as the U.K. Streamlined Energy and Carbon Reporting, the European Union Corporate Sustainability Reporting Directive, or “EU CSRD”, and the SEC proposed rules related to climate change) and human rights (such as the European Union Corporate Sustainability Due Diligence Directive).

Broader ESG matters include other environmental matters, treatment of employees and diversity of workforce (such as the EU CSRD).

| | | | Preferential or Protective Government Actions | | | | | | | | | | | | Information Security and Operational Resilience | | | | | | Talent and Culture | | | | | |

| | | | Privacy, Data and Security | | | | | | | | | | | | Stakeholder Relationships | | | | | | Acquisitions | | | | | |

| | | | Litigation | | | | | | | | | | | | | | | | | | | | | | | |

ITEM 1A.

RISK FACTORS

Jurisdictions increasingly have regulated or established and expanded authority over certain aspects of payments systems such as ours, or have sought to do so.

New regulations and oversight could also relate to our clearing and settlement activities (including policies, procedures and requirements related to risk management, collateral, participant default, timely switching of financial transactions, and capital and financial resource).

Several jurisdictions have also inquired about the network fees we charge to our customers (in some cases as part of broader market reviews of retail payments).

Several central banks or similar regulatory bodies around the world have also increased, or are seeking to increase, their formal oversight of the electronic payments industry.

In several jurisdictions, we have been designated as a “systemically important payment system”, with other regulators considering similar designations.

Parts of our business have also been deemed as a “specified service provider” and considered critical national infrastructure.

These obligations, designations and restrictions result in heightened regulatory oversight and scrutiny.

They may further expand and could conflict with each other as more jurisdictions impose oversight of payments systems.

Moreover, these efforts may influence the approaches of other regulators around the world that are increasingly looking to replicate similar regulation of payments and other industries.

Similarly, jurisdictions that regulate a particular product may extend their regulation to similar products (for example, debit regulations could lead to regulation of credit products or network fees).

As a result, the risks to our business created by any one new law or regulation are magnified by the potential it has to be replicated in other jurisdictions or involve other products within any particular jurisdiction.

The expansion of our products and services as part of our multi-rail strategy have also created the need for us to obtain new types and increasing numbers of regulatory licenses, resulting in increased supervision and additional compliance burdens distinct from those imposed on our core payment network activities.

For example, certain of our subsidiaries maintain money transfer licenses to support certain activities.

These licenses typically impose supervisory and examination requirements, as well as capital, safeguarding, risk management and other business obligations.

Increased regulation and oversight of payments systems, as well as increased exposure to regulation resulting from changes to our products and services, have resulted and may continue to result in significant compliance and governance burdens or otherwise increase our costs.

As a result, customers could be less willing to participate in our payments system and/or use our other products or services, reduce the benefits offered in connection with the use of our products (making our products less desirable to consumers), reduce the volume of domestic and cross-border transactions or other operational metrics, disintermediate us, impact our profitability and/or limit our ability to innovate or offer differentiated products and services, all of which could materially and adversely impact our financial performance.

In addition, any regulation that is enacted related to the type and level of network fees we charge our customers could also materially and adversely impact our results of operations.

Regulators could also require us to obtain prior approval for changes to our system rules, procedures or operations, or could require customization with regard to such changes, which could negatively impact us.

Such changes could lead to new or different criteria for participation in and access to our payments system by financial institutions or other customers.

Moreover, failure to comply with the laws and regulations to which we are subject could result in fines, sanctions, civil damages or other penalties, which could materially and adversely affect our overall business and results of operations, as well as have an impact on our brand and reputation.

Increased regulatory, legislative and litigation activity with respect to interchange rates could have an adverse impact on our business.

Interchange rates are a significant component of the costs that merchants pay in connection with the acceptance of products associated with our core payment network.

Although we do not earn revenues from interchange, interchange rates can impact the volume of transactions we see on our payment products.

If interchange rates are too high, merchants may stop accepting our products or route transactions away from our network.

If interchange rates are too low, issuers may stop promoting our integrated products and services, eliminate or reduce loyalty rewards programs or other account holder benefits (e.g., free checking or low interest rates on balances), or charge fees to account holders (e.g., annual fees or late payment fees).

Governments and merchant groups in a number of countries have implemented or are seeking interchange rate reductions through legislation, competition law, central bank regulation and litigation.

See “Business - Government Regulation” in Part I, Item 1 and Note 21 (Legal and Regulatory Proceedings) to the consolidated financial statements included in Part II, Item 8 for more details.

26 MASTERCARD 2022 FORM 10-K

PART I

Sustainability. Various jurisdictions are increasingly considering or adopting laws and regulations that would impact us pertaining to ESG performance, transparency and reporting.

Regulations being considered include mandated corporate reporting on sustainability matters generally (such as the European Union Corporate Sustainability Reporting Directive) as well as in specific areas such as mandated reporting on climate-related financial disclosures.

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | Litigation | | | | | | | | | | | | Settlement and Third-Party Obligations | | | | | | | | | | | |

Regulators increasingly seek to regulate certain aspects of payments systems such as ours, or establish or expand their authority to do so.

For the fiscal year ended December 31, [removed: 2021][added: 2022]

| | | | | | | [removed: ] [added: ] | | | | | | | | | | | | | | |

| [removed: 1.1%] [added: 1.0%] Notes due [removed: 2022] [added: 2029] | | | | | | [removed: MA22] [added: MA29A] | | | | | | New York Stock Exchange | | |

The aggregate market value of the registrant’s Class A common stock, par value $0.0001 per share, held by non-affiliates (using the New York Stock Exchange closing price as of June 30, [removed: 2021,] [added: 2022,] the last business day of the registrant’s most recently completed second fiscal quarter) was approximately [removed: $317.9] [added: $270.1] billion.

As of February 8, [removed: 2022,] [added: 2023,] there were [removed: 969,729,455] [added: 945,723,000] shares outstanding of the registrant’s Class A common stock, par value $0.0001 per share and [removed: 7,746,984] [added: 7,519,534] shares outstanding of the registrant’s Class B common stock, par value $0.0001 per share.

| Portions of the registrant’s definitive proxy statement for the [removed: 2022] [added: 2023] Annual Meeting of Stockholders are incorporated by reference into Part III hereof. | | |

[removed: ][added: ]

MASTERCARD INCORPORATED FISCAL YEAR [removed: 2021] [added: 2022] FORM 10-K ANNUAL REPORT

| PART I | | | [removed: [6](#ifc9293bf99c744279400f5fac9866383_16)] [added: [6](#ief7e67cb5fe84c30b59c87b2d0fbc770_16)] | | | [Item [removed: 1.](#ifc9293bf99c744279400f5fac9866383_16)] [added: 1.](#ief7e67cb5fe84c30b59c87b2d0fbc770_16)] | | | [removed: [Business](#ifc9293bf99c744279400f5fac9866383_16)] [added: [Business](#ief7e67cb5fe84c30b59c87b2d0fbc770_16)] | | |

| [removed: [23](#ifc9293bf99c744279400f5fac9866383_19)] [added: [25](#ief7e67cb5fe84c30b59c87b2d0fbc770_19)] | | | [Item [removed: 1A.](#ifc9293bf99c744279400f5fac9866383_19)] [added: 1A.](#ief7e67cb5fe84c30b59c87b2d0fbc770_19)] | | | [Risk [removed: factors](#ifc9293bf99c744279400f5fac9866383_19)] [added: factors](#ief7e67cb5fe84c30b59c87b2d0fbc770_19)] | | | | | |

| [removed: [37](#ifc9293bf99c744279400f5fac9866383_22)] [added: [40](#ief7e67cb5fe84c30b59c87b2d0fbc770_22)] | | | [Item [removed: 1B.](#ifc9293bf99c744279400f5fac9866383_22)] [added: 1B.](#ief7e67cb5fe84c30b59c87b2d0fbc770_22)] | | | [Unresolved staff [removed: comments](#ifc9293bf99c744279400f5fac9866383_22)] [added: comments](#ief7e67cb5fe84c30b59c87b2d0fbc770_22)] | | | | | |

| [removed: [37](#ifc9293bf99c744279400f5fac9866383_25)] [added: [40](#ief7e67cb5fe84c30b59c87b2d0fbc770_25)] | | | [Item [removed: 2.](#ifc9293bf99c744279400f5fac9866383_25)] [added: 2.](#ief7e67cb5fe84c30b59c87b2d0fbc770_25)] | | | [removed: [Properties](#ifc9293bf99c744279400f5fac9866383_25)] [added: [Properties](#ief7e67cb5fe84c30b59c87b2d0fbc770_25)] | | | | | |

| [removed: [37](#ifc9293bf99c744279400f5fac9866383_28)] [added: [40](#ief7e67cb5fe84c30b59c87b2d0fbc770_28)] | | | [Item [removed: 3.](#ifc9293bf99c744279400f5fac9866383_28)] [added: 3.](#ief7e67cb5fe84c30b59c87b2d0fbc770_28)] | | | [Legal [removed: proceedings](#ifc9293bf99c744279400f5fac9866383_28)] [added: proceedings](#ief7e67cb5fe84c30b59c87b2d0fbc770_28)] | | | | | |

| [removed: [37](#ifc9293bf99c744279400f5fac9866383_31)] [added: [40](#ief7e67cb5fe84c30b59c87b2d0fbc770_31)] | | | [Item [removed: 4.](#ifc9293bf99c744279400f5fac9866383_31)] [added: 4.](#ief7e67cb5fe84c30b59c87b2d0fbc770_31)] | | | [Mine safety [removed: disclosures](#ifc9293bf99c744279400f5fac9866383_31)] [added: disclosures](#ief7e67cb5fe84c30b59c87b2d0fbc770_31)] | | | | | |

| | | | [removed: [38](#ifc9293bf99c744279400f5fac9866383_34)] [added: [41](#ief7e67cb5fe84c30b59c87b2d0fbc770_34)] | | | [removed: [\-](#ifc9293bf99c744279400f5fac9866383_34)] [added: [\-](#ief7e67cb5fe84c30b59c87b2d0fbc770_34)] | | | [Information about our executive [removed: officers](#ifc9293bf99c744279400f5fac9866383_34)] [added: officers](#ief7e67cb5fe84c30b59c87b2d0fbc770_34)] | | |

| PART II | | | [removed: [42](#ifc9293bf99c744279400f5fac9866383_40)] [added: [44](#ief7e67cb5fe84c30b59c87b2d0fbc770_40)] | | | [Item [removed: 5.](#ifc9293bf99c744279400f5fac9866383_40)] [added: 5.](#ief7e67cb5fe84c30b59c87b2d0fbc770_40)] | | | [Market for registrant’s common equity, related stockholder matters and issuer purchases of equity [removed: securities](#ifc9293bf99c744279400f5fac9866383_40)] [added: securities](#ief7e67cb5fe84c30b59c87b2d0fbc770_40)] | | |

| [removed: [43](#ifc9293bf99c744279400f5fac9866383_43)] [added: [44](#ief7e67cb5fe84c30b59c87b2d0fbc770_43)] | | | [Item [removed: 6.](#ifc9293bf99c744279400f5fac9866383_43)] [added: 6.](#ief7e67cb5fe84c30b59c87b2d0fbc770_43)] | | | Reserved | | | | | |

| [removed: [44](#ifc9293bf99c744279400f5fac9866383_46)] [added: [45](#ief7e67cb5fe84c30b59c87b2d0fbc770_46)] | | | [Item [removed: 7.](#ifc9293bf99c744279400f5fac9866383_46)] [added: 7.](#ief7e67cb5fe84c30b59c87b2d0fbc770_46)] | | | [Management’s discussion and analysis of financial condition and results of [removed: operations](#ifc9293bf99c744279400f5fac9866383_46)] [added: operations](#ief7e67cb5fe84c30b59c87b2d0fbc770_46)] | | | | | |

| [removed: [58](#ifc9293bf99c744279400f5fac9866383_76)] [added: [60](#ief7e67cb5fe84c30b59c87b2d0fbc770_76)] | | | [Item [removed: 7A.](#ifc9293bf99c744279400f5fac9866383_76)] [added: 7A.](#ief7e67cb5fe84c30b59c87b2d0fbc770_76)] | | | [Quantitative and qualitative disclosures about market [removed: risk](#ifc9293bf99c744279400f5fac9866383_76)] [added: risk](#ief7e67cb5fe84c30b59c87b2d0fbc770_76)] | | | | | |

| [removed: [59](#ifc9293bf99c744279400f5fac9866383_79)] [added: [62](#ief7e67cb5fe84c30b59c87b2d0fbc770_79)] | | | [Item [removed: 8.](#ifc9293bf99c744279400f5fac9866383_79)] [added: 8.](#ief7e67cb5fe84c30b59c87b2d0fbc770_79)] | | | [Financial statements and supplementary [removed: data](#ifc9293bf99c744279400f5fac9866383_79)] [added: data](#ief7e67cb5fe84c30b59c87b2d0fbc770_79)] | | | | | |

| [removed: [112](#ifc9293bf99c744279400f5fac9866383_187)] [added: [113](#ief7e67cb5fe84c30b59c87b2d0fbc770_187)] | | | [Item [removed: 9.](#ifc9293bf99c744279400f5fac9866383_187)] [added: 9.](#ief7e67cb5fe84c30b59c87b2d0fbc770_187)] | | | [Changes in and disagreements with accountants on accounting and financial [removed: disclosure](#ifc9293bf99c744279400f5fac9866383_187)] [added: disclosure](#ief7e67cb5fe84c30b59c87b2d0fbc770_187)] | | | | | |

| [removed: [112](#ifc9293bf99c744279400f5fac9866383_190)] [added: [113](#ief7e67cb5fe84c30b59c87b2d0fbc770_190)] | | | [Item [removed: 9A.](#ifc9293bf99c744279400f5fac9866383_190)] [added: 9A.](#ief7e67cb5fe84c30b59c87b2d0fbc770_190)] | | | [Controls and [removed: procedures](#ifc9293bf99c744279400f5fac9866383_190)] [added: procedures](#ief7e67cb5fe84c30b59c87b2d0fbc770_190)] | | | | | |

| [removed: [112](#ifc9293bf99c744279400f5fac9866383_193)] [added: [113](#ief7e67cb5fe84c30b59c87b2d0fbc770_193)] | | | [Item [removed: 9B.](#ifc9293bf99c744279400f5fac9866383_193)] [added: 9B.](#ief7e67cb5fe84c30b59c87b2d0fbc770_193)] | | | [removed: [Other Information](#ifc9293bf99c744279400f5fac9866383_193)] [added: [Other](#ief7e67cb5fe84c30b59c87b2d0fbc770_193) [i](#ief7e67cb5fe84c30b59c87b2d0fbc770_193)[nformation](#ief7e67cb5fe84c30b59c87b2d0fbc770_193)] | | | | | |

| PART III | | | [removed: [114](#ifc9293bf99c744279400f5fac9866383_199)] [added: [115](#ief7e67cb5fe84c30b59c87b2d0fbc770_199)] | | | [Item [removed: 10.](#ifc9293bf99c744279400f5fac9866383_199)] [added: 10.](#ief7e67cb5fe84c30b59c87b2d0fbc770_199)] | | | [Directors, executive officers and corporate [removed: governance](#ifc9293bf99c744279400f5fac9866383_199)] [added: governance](#ief7e67cb5fe84c30b59c87b2d0fbc770_199)] | | |

| [removed: [114](#ifc9293bf99c744279400f5fac9866383_202)] [added: [115](#ief7e67cb5fe84c30b59c87b2d0fbc770_202)] | | | [Item [removed: 11.](#ifc9293bf99c744279400f5fac9866383_202)] [added: 11.](#ief7e67cb5fe84c30b59c87b2d0fbc770_202)] | | | [Executive [removed: compensation](#ifc9293bf99c744279400f5fac9866383_202)] [added: compensation](#ief7e67cb5fe84c30b59c87b2d0fbc770_202)] | | | | | |

| [removed: [114](#ifc9293bf99c744279400f5fac9866383_205)] [added: [115](#ief7e67cb5fe84c30b59c87b2d0fbc770_205)] | | | [Item [removed: 12.](#ifc9293bf99c744279400f5fac9866383_205)] [added: 12.](#ief7e67cb5fe84c30b59c87b2d0fbc770_205)] | | | [Security ownership of certain beneficial owners and management and related stockholder [removed: matters](#ifc9293bf99c744279400f5fac9866383_205)] [added: matters](#ief7e67cb5fe84c30b59c87b2d0fbc770_205)] | | | | | |

| [removed: [114](#ifc9293bf99c744279400f5fac9866383_208)] [added: [115](#ief7e67cb5fe84c30b59c87b2d0fbc770_208)] | | | [Item [removed: 13.](#ifc9293bf99c744279400f5fac9866383_208)] [added: 13.](#ief7e67cb5fe84c30b59c87b2d0fbc770_208)] | | | [Certain relationships and related transactions, and director [removed: independence](#ifc9293bf99c744279400f5fac9866383_208)] [added: independence](#ief7e67cb5fe84c30b59c87b2d0fbc770_208)] | | | | | |

| [removed: [114](#ifc9293bf99c744279400f5fac9866383_211)] [added: [115](#ief7e67cb5fe84c30b59c87b2d0fbc770_211)] | | | [Item [removed: 14.](#ifc9293bf99c744279400f5fac9866383_211)] [added: 14.](#ief7e67cb5fe84c30b59c87b2d0fbc770_211)] | | | [Principal accountant fees and [removed: services](#ifc9293bf99c744279400f5fac9866383_211)] [added: services](#ief7e67cb5fe84c30b59c87b2d0fbc770_211)] | | | | | |

| PART IV | | | [removed: [116](#ifc9293bf99c744279400f5fac9866383_217)] [added: [117](#ief7e67cb5fe84c30b59c87b2d0fbc770_217)] | | | [Item [removed: 15.](#ifc9293bf99c744279400f5fac9866383_217)] [added: 15.](#ief7e67cb5fe84c30b59c87b2d0fbc770_217)] | | | [Exhibits and financial statement [removed: schedules](#ifc9293bf99c744279400f5fac9866383_217)] [added: schedules](#ief7e67cb5fe84c30b59c87b2d0fbc770_217)] | | |

| [removed: [116](#ifc9293bf99c744279400f5fac9866383_220)] [added: [117](#ief7e67cb5fe84c30b59c87b2d0fbc770_220)] | | | [Item [removed: 16.](#ifc9293bf99c744279400f5fac9866383_220)] [added: 16.](#ief7e67cb5fe84c30b59c87b2d0fbc770_220)] | | | [Form 10-K [removed: summary](#ifc9293bf99c744279400f5fac9866383_220)] [added: summary](#ief7e67cb5fe84c30b59c87b2d0fbc770_220)] | | | | | |

MASTERCARD [removed: 2021] [added: 2022] FORM 10-K 3

- regulation that directly or indirectly applies to us based on our participation in the global payments industry (including anti-money laundering, counter financing of terrorism, economic sanctions and anti-corruption, account-based payments systems, and issuer [added: and acquirer] practice regulation)

- issues related to our relationships with our stakeholders (including loss of substantial business from significant customers, competitor relationships with our customers, [removed: banking industry consolidation,] [added: consolidation amongst our customers,] merchants’ continued focus on acceptance costs and unique risks from our work with governments)

- the impact of global economic, political, financial and societal events and conditions, including adverse currency fluctuations and foreign exchange controls [added: as well as events and resulting actions related to the Russian invasion of Ukraine]

- the inability to [removed: attract, hire] [added: attract] and retain a highly qualified and diverse workforce, or maintain our corporate culture

4 MASTERCARD [removed: 2021] [added: 2022] FORM 10-K

| | | | | | | [Item 1. [removed: Business](#ifc9293bf99c744279400f5fac9866383_16)] [added: Business](#ief7e67cb5fe84c30b59c87b2d0fbc770_16)] | | | | | | | | | | | |

| | | | | | | [Item 1A. Risk [removed: factors](#ifc9293bf99c744279400f5fac9866383_19)] [added: factors](#ief7e67cb5fe84c30b59c87b2d0fbc770_19)] | | | | | | | | | | | |

| | | | | | | [Item 1B. Unresolved staff [removed: comments](#ifc9293bf99c744279400f5fac9866383_22)] [added: comments](#ief7e67cb5fe84c30b59c87b2d0fbc770_22)] | | | | | | | | | | | |

| | | | | | | [Item 2. [removed: Properties](#ifc9293bf99c744279400f5fac9866383_25)] [added: Properties](#ief7e67cb5fe84c30b59c87b2d0fbc770_25)] | | | | | | | | | | | |

| If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. | | | | | | | | | | | | | | | | | | | | | ☐ | | |

| Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). | | | | | | | | | | | | | | | | | | | | | ☐ | | |

- the impact of environmental, social and governance matters and related stakeholder reaction

Mastercard is a technology company in the global payments industry.

Our franchise model sets the standards and ground-rules for our core global payments network that balance value and risk across all stakeholders and allows for interoperability among them.

| $22.2B | | | | | | | | | | | | $9.9B | | | | | | | | | | | | $10.22 | | | | | |

| up 18% | | | | | | | | | | | | up 14% | | | | | | | | | | | | up 17% | | | | | |

| $22.2B | | | | | | | | | | | | $10.3B | | | | | | | | | | | | $10.65 | | | | | |

| up 23% | | | | | | | | | | | | up 32% | | | | | | | | | | | | up 34% | | | | | |

| $10.7B | | | | | | | | | | | | $8.8B | | | Repurchased shares | | | | | | | | | $11.2B | | | | | |

| $8.2T | | | | | | | | | | | | up 45% | | | | | | | | | | | | 125.7B | | | | | |

| up 12% | | | | | | | | | | | | | | | | | | up 12% | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Consumer Credit | | | | | | $ | 3,143 | | | | | 15 | | % | | | | 38 | | % | | | | 992 | | | | | | 3 | | % | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Our strategy | | | Our key priorities | | | Powering our success | | | | | |

| Grow our core | | | People | | | Brand | | | | | |

| Diversify into new customers and geographies | | | Data | | | Technology | | | | | |

| Build new areas for the future | | | Franchise | | | Doing well by doing good | | | | | |

- Enabling digital identity solutions to instill trust in the digital world and ensure that payments across consumers, companies, devices and virtual entities are efficient, safe and secure

Doing Well by Doing Good. Sustainable impact is fundamental to our business strategy, and we leverage our employees, technology, resources, partnerships and expertise to address social, economic and environmental challenges.

Our environmental, social and governance (“ESG”) priorities are expressed through three pillars - People, Prosperity, Planet - and all of the work we do is grounded in strong governance principles.

Payment Network

Our approach includes supporting small businesses by

sharing best practices and providing access to free utilities and services, benefiting both them and the entire payments ecosystem.

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| We offer platforms that apply our multi-rail payment capabilities to capture new payment flows, enabling us to serve the needs of a significant addressable market. Disbursements and Remittances. We offer applications that enable consumers, businesses, governments and merchants to send and receive money domestically and across borders with greater speed and ease. •Using Mastercard Send™, we partner with digital messaging and payment platforms to enable consumers in approximately 50 markets to send money directly within applications to other consumers in more than 100 markets. We | | | | | | | | | Key 2022 Developments | | | | | |

| | | | •In 2022, our Disbursements and Remittances capabilities achieved a payout reach of nearly 10 billion endpoints globally across multiple channels. | | | | | | | | | | | |

| | | | | | | | | | | | | | | |

Our point of sale offerings include:

- Small business cards (credit, debit and prepaid) tailored to small and medium businesses.

- Commercial travel and entertainment, procurement and fleet cards, consisting mostly of credit cards and associated platforms for corporations to manage travel and expense, procurement and fleet expenses.

B2B Accounts Payable. We offer solutions that enable businesses or governments to make payments to businesses with whom they have a trusted relationship for goods and services.

Our solutions include Virtual Card Number (VCN), which is generated dynamically off a physical card and leverages the credit limit of the funding account and may include the use of Mastercard InControl™, our virtual card platform that allows buyers to pay suppliers using a one-time use card number that can be set with transaction level controls, providing unmatched configurability and flexibility.

Additionally, we offer a platform to optimize supplier payment enablement campaigns for financial institutions, as well as our treasury intelligence platform that provides corporations with recommendations to improve working capital performance and accelerate spend on cards.

Consumer Bill Payments. We offer bill pay solutions to enable consumers and small businesses to pay their billers in a seamless and secure way.

| $18.9B | | | | | | | | | | | | $8.7B | | | | | | | | | | | | $8.76 | | | | | |

| up 23% | | | | | | | | | | | | up 35% | | | | | | | | | | | | up 38% | | | | | |

| $18.9B | | | | | | | | | | | | $8.3B | | | | | | | | | | | | $8.40 | | | | | |

| up 22% | | | | | | | | | | | | up 28% | | | | | | | | | | | | up 30% | | | | | |

| $7.6B | | | | | | | | | | | | $5.9B | | | Repurchased shares | | | | | | | | | $9.5B | | | | | |

| | | | $7.7T | | | | | | | | | | | | up 32% | | | | | | | | | | | | 112.1B | | |

| | | | up 21% | | | | | | | | | | | | | | | | | | | | | up 25% | | | | | |

- Enabling digital identity solutions*,* including device intelligence, document proofing, internet protocol (“IP”) intelligence, biometrics, transaction fraud data, location, identity attributes and payment authorization to make transactions across individual devices and accounts efficient, safe and secure

They also power our open banking and digital identity platforms

Doing Well by Doing Good. We apply the full breadth of our technology, insights, partnerships and people to build a more financially inclusive and sustainable digital economy, with a commitment to diversity, equity and inclusion and a focus on a sustainable future.

We are committed to our core values of operating ethically, responsibly and with decency.

This commitment is directly connected to our continuing success as a business.

Core Network

to accept, our products and services across country borders.

We also provide prepaid program management services, primarily outside of the United States, that provide processing and end-to-end services on behalf of issuers or distributor partners such as airlines, foreign exchange bureaus and travel agents.

Our point of sale offerings include small business (debit and credit), travel and entertainment, purchasing cards and fleet cards.

Our virtual card offerings, supported by our Mastercard In Control™ platform, generate virtual account numbers which provide businesses with enhanced controls, more security and better data.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Mastercard-branded Programs1,2 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Consumer Credit | | | | | | $ | 2,899 | | | | | 18 | | % | | | | 38 | | % | | | | 968 | | | | | | 9 | | % |

We offer platforms that apply our payment capabilities to support and capture new payment flows beyond cards.

Disbursements and Remittances. We offer applications that enable consumers, businesses, governments and merchants to send and receive money domestically and across borders with greater speed and ease.

- Using Mastercard Send, we partner with digital messaging and payment platforms to enable consumers to send and receive money directly within applications.

B2B Payments. We continue to focus on developing solutions to address ways that businesses move money, building on our point of sale capabilities to capture B2B payments.

We offer B2B solutions globally that optimize customer choice, enabling payments through card, ACH and real-time payment rails.

Mastercard Track BPS, our two-sided open-loop commercial service platform, is aimed at improving the way businesses pay and get paid by simplifying and automating payments between suppliers and buyers.

It provides a single connection enabling access to multiple payment rails, providing greater control, richer data and working capital optimization capabilities to enhance B2B transactions for both buyers and suppliers.

Track BPS leverages multiple payment options, including both real-time payments and batch ACH, as well as our core network.

Consumer Bill Payments.

Payments can be made in a variety of ways, using cards, real-time payments or batch ACH payments through a digital interface, providing a convenient, secure and paperless means to manage household bills in one place.

- Our bill pay solutions, which include Bill Pay Exchange, provide an open, Application Programming Interface (“API”) based bill pay network that leverages real-time messaging to connect consumers with billers and merchants through the home banking channel.

We also provide real-time bill pay solutions as well as clearing and instant payment services.

Our solutions enable enhanced biller setup and expanded bill presentment.

| | | | •During 2021, we announced the expansion of several programs that enabled consumers to either use their cards to purchase cryptocurrencies or to convert their cryptocurrencies back into fiat currencies at their respective financial institutions. | | | | | | | | |

◦Our Digital Doors program helps small businesses establish and protect an online presence, including accepting digital payments

| | | | •We acquired CipherTrace, a leading digital currency intelligence platform that can map and trace blockchain-based transactions between entities, providing greater transparency and helping manage regulatory and compliance obligations. | | | | | | | | |

| | | | •We became the first company to announce the retirement of legacy magnetic stripe technology enabling us to focus on technologies, such as chip and contactless, which provide increased security. | | | | | | | | |

Our capabilities incorporate payments expertise and analytical and executional skills to create end-to-end solutions which are increasingly delivered via platforms embedded in our customers’ day-to-day operations.

We offer business intelligence to monitor key performance indicators (“KPIs”) and benchmark performance through self-service digital platforms, tools, and reports for financial institutions, merchants and others.

As of December 31, [removed: 2021,] [added: 2022,] Mastercard and its subsidiaries owned or leased commercial properties throughout the U.S. and other countries around the world, consisting of corporate and regional offices, as well as our operations centers.

[added: 40] MASTERCARD [removed: 2021] [added: 2022] FORM 10-K [removed: 37]

| Ajay Bhalla*President, Cyber andIntelligence Solutions*since November 2018 | | | | | | [removed: 56] [added: 57] | | | | | | President, Enterprise Security Solutions (2014-2018) President, Digital Gateway Services (2011-2013) President, South Asia and Southeast Asia (2008-2011) Various senior leadership positions, including President, Southeast Asia; Country Manager, Singapore and Head of Marketing, Southeast Asia; Vice President | | | | | | Various leadership positions at HSBC and Xerox Corporation | | |

| Michael Froman *Vice Chairman and President, Strategic Growth* since April 2018 | | | | | | [removed: 59] [added: 60] | | | | | | Mr. Froman joined the Company in 2018 in his current role | | | | | | U.S. Trade Representative in the Executive Office of President Obama (2013-2017) Assistant to the President and Deputy National Security Advisor for International Economic Policy (2009-2013) Various senior leadership positions at Citigroup, including CEO, CitiInsurance and COO of Citigroup’s alternative investments business | | |

[removed: 38] MASTERCARD [removed: 2021] [added: 2022] FORM 10-K [added: 41]

| Linda Kirkpatrick *President, North America* since January 2021 | | | | | | [removed: 45] [added: 46] | | | | | | President, U.S. Issuers (2020) Executive Vice President, Merchants and Acceptance (2016-2020) Senior Vice President, Core Merchants (2013-2016) Senior Vice President, Franchise Development (2011-2013) Vice President, U.S. Region (2008-2011) Vice President, Investor Relations | | | | | | | | |

| Edward [removed: McLaughlin*President, Operations] [added: McLaughlin*President] and [added: Chief Technology Officer, Mastercard] Technology*since May 2017 | | | | | | [removed: 56] [added: 57] | | | | | | Chief Information Officer (2016-2017) Chief Emerging Payments Officer (2010-2015) Various senior leadership roles, including Chief Franchise Development Officer and Senior Vice President, Bill Payment and Healthcare | | | | | | Group Vice President, Product and Strategy, Metavante Corporation Co-Founder and CEO, Paytrust, Inc. | | |

| Sachin Mehra*Chief Financial Officer*since April 2019 | | | | | | [removed: 51] [added: 52] | | | | | | Chief Financial Operations Officer (2018-2019) Executive Vice President, Commercial Products (2015-2018) Executive Vice President and Business Financial Officer, North America (2013-2015) Corporate Treasurer (2010-2013) | | | | | | Various senior positions at Hess Corporation, including Vice President and Treasurer Various senior treasury and finance positions, General Motors Corporation and GMAC | | |

| Michael Miebach *President and Chief Executive Officer* since January 2021 | | | | | | [removed: 54] [added: 55] | | | | | | President (2020) Chief Product Officer (2016-2020) President, Middle East and Africa (2010-2015) | | | | | | Managing Director, Middle East and North Africa and Managing Director, Sub-Saharan Africa, Barclays Bank PLC Various executive positions at Citigroup in Germany, Austria, U.K. and Turkey | | |

| Tim Murphy*Chief Administrative Officer*since April 2021 | | | | | | [removed: 54] [added: 55] | | | | | | General Counsel (2014-2021) Chief Product Officer (2009-2014) Various senior leadership roles, including President, U.S. Region; Executive Vice President, Customer Business Planning and Analysis; and Senior Vice President and Associate General Counsel | | | | | | Associate, Cleary, Gottlieb, Steen and Hamilton, New York and London | | |

| Raja Rajamannar*Chief Marketing and Communications Officer and President, Healthcare*since January 2016 | | | | | | [removed: 60] [added: 61] | | | | | | Chief Marketing Officer (2013-2015) | | | | | | Executive Vice President-Senior Business and Chief Transformation Officer, Anthem (formerly, WellPoint, Inc.) (2012- 2013) Senior Vice President and Chief Innovation and Marketing Officer, Humana Inc. (2009-2012) Various management positions at Citigroup, including Executive Vice President and Chief Marketing Officer-Citi Global Cards | | |

[added: 42] MASTERCARD [removed: 2021] [added: 2022] FORM 10-K [removed: 39]

| Raj Seshadri*President, Data and Services*since January 2020 | | | | | | [removed: 56] [added: 57] | | | | | | President, U.S. Issuers (2016-2019) | | | | | | Managing Director, Head of iShares U.S. Wealth Advisory business, BlackRock (2014-2016) Managing Director, Global Marketing Officer of iShares, BlackRock, Inc. (2012-2014) Various leadership positions at Citigroup, U.S. Trust Company and McKinsey & Company, Inc. | | |

| Craig Vosburg*Chief Product Officer*since January 2021 | | | | | | [removed: 54] [added: 55] | | | | | | President, North America (2016-2020) Chief Product Officer (2014-2015) Executive Vice President, U.S. Market Development (2010-2014) Various senior leadership roles, including Head of Mastercard Advisors, U.S. and Canada and Head of Mastercard Advisors, Southeast Asia, Greater China and South Asia/Middle East/Africa | | | | | | Senior member-financial services practice, Bain & Company and A.T. Kearney Vice [removed: president,] [added: President,] CoreStates Financial Corporation | | |

| | | | | | | [Item 5. Market for registrant’s common equity, related stockholder matters and issuer purchases of equity [removed: securities](#ifc9293bf99c744279400f5fac9866383_40)] [added: securities](#ief7e67cb5fe84c30b59c87b2d0fbc770_40)] | | | | | | | | | | | |

| | | | | | | [Item [removed: 6.](#ifc9293bf99c744279400f5fac9866383_43) [](#ifc9293bf99c744279400f5fac9866383_43)Reserved] [added: 6.](#ief7e67cb5fe84c30b59c87b2d0fbc770_43) [](#ief7e67cb5fe84c30b59c87b2d0fbc770_43)Reserved] | | | | | | | | | | | |

| | | | | | | [Item 7. Management’s discussion and analysis of financial condition and results of [removed: operations](#ifc9293bf99c744279400f5fac9866383_46)] [added: operations](#ief7e67cb5fe84c30b59c87b2d0fbc770_46)] | | | | | | | | | | | |

| | | | | | | [Item 7A. Quantitative and qualitative disclosures about market [removed: risk](#ifc9293bf99c744279400f5fac9866383_76)] [added: risk](#ief7e67cb5fe84c30b59c87b2d0fbc770_76)] | | | | | | | | | | | |

| | | | | | | [Item 8. Financial statements and supplementary [removed: data](#ifc9293bf99c744279400f5fac9866383_79)] [added: data](#ief7e67cb5fe84c30b59c87b2d0fbc770_79)] | | | | | | | | | | | |

| | | | | | | [Item 9. Changes in and disagreements with accountants on accounting and financial [removed: disclosure](#ifc9293bf99c744279400f5fac9866383_187)] [added: disclosure](#ief7e67cb5fe84c30b59c87b2d0fbc770_187)] | | | | | | | | | | | |

| | | | | | | [Item 9A. Controls and [removed: procedures](#ifc9293bf99c744279400f5fac9866383_190)] [added: procedures](#ief7e67cb5fe84c30b59c87b2d0fbc770_190)] | | | | | | | | | | | |

| | | | | | | [Item 9B. Other [removed: information](#ifc9293bf99c744279400f5fac9866383_193)] [added: information](#ief7e67cb5fe84c30b59c87b2d0fbc770_193)] | | | | | | | | | | | |

(as of February 14, 2023)

| Hai Ling*Co-President International Markets*since January 2022 | | | | | | 52 | | | | | | Co-President, Asia Pacific (2015-2021) President, Enterprise Development (2014-2015) President, Greater China (2010-2014) | | | | | | Various roles at Booz Allen Hamilton and Bank of America | | |

| Raghu Malhotra*Co-President International Markets*since January 2022 | | | | | | 53 | | | | | | President, Middle East and Africa (2016-2021) Division President, Middle East and North Africa (2012-2015) Various leadership roles (2000-2005) | | | | | | Various roles at Citicorp, American Express and ANZ Grindlays Bank (1992-2000) | | |

PART I

EXECUTIVE OFFICERS

(as of February 11, 2022)

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Ann Cairns*Vice Chairman*since June 2018 | | | | | | 65 | | | | | | President, International (2011-2018) | | | | | | Managing director, Alvarez & Marsal CEO, ABN AMRO Senior corporate and investment banking roles at Citigroup | | |

| Gilberto Caldart *Vice Chairman, Senior Client Partnerships and Relationships* since January 2022 | | | | | | 62 | | | | | | President, International (2018-2021) President, Latin America and Caribbean region (2013-2018) Division President, South Latin America/Brazil (2008-2013) | | | | | | Various leadership positions at Citigroup, including Country Business Manager, Brazil | | |

| Michael Fraccaro*Chief People Officer*since July 2016 | | | | | | 56 | | | | | | Executive Vice President, Human Resources, Global Products and Solutions (2014-2016) Senior Vice President, Human Resources, Global Products and Solutions (2012-2014) | | | | | | Various executive-level human resources positions at HSBC Group, Hong Kong (2000-2012) Various senior human resources positions in banking and financial services in Australia and the Middle East | | |

| Name Current Position | | | | | | Age | | | | | | Previous Mastercard Experience | | | | | | Previous Business Experience | | |

| Kevin Stanton*Chief Transformation Officer*since January 2020 | | | | | | 60 | | | | | | Chief Services Officer (2018-2019) President, Mastercard Advisors (2010-2017) Various senior leadership roles, including President, Canada; Senior Vice President, Strategy and Market Development; and Vice President, Senior Counsel and North America Region Counsel | | | | | | Vice President, Counsel, Shawmut National Corporation | | |

| Rich Verma*General Counsel and Head of Global Public Policy*since April 2021 | | | | | | 53 | | | | | | Executive Vice President of Global Public Policy and Regulatory Affairs (2020-2021) | | | | | | Vice Chairman & Partner, The Asia Group (2017-2020) U.S. Ambassador to India (2014-2017) Assistant Secretary of State (2009-2011) Member, Commission on the Prevention of WMD Proliferation and Terrorism (2008) National Security Advisor to Senate Majority Leader, Harry Reid (2002-2007) | | |

40 MASTERCARD 2021 FORM 10-K

PART II

ITEM 5.

Market for registrant’s common equity, related stockholder matters and issuer purchases of equity securities

Our Class A common stock trades on the New York Stock Exchange under the symbol “MA”.

At February 8, 2022, we had 71 stockholders of record for our Class A common stock.

We believe that the number of beneficial owners is substantially greater than the number of record holders because a large portion of our Class A common stock is held in “street name” by brokers.

There is currently no established public trading market for our Class B common stock.

There were approximately 240 holders of record of our non-voting Class B common stock as of February 8, 2022, constituting approximately 0.8% of our total outstanding equity.

Stock Performance Graph

The graph and table below compare the cumulative total stockholder return of Mastercard’s Class A common stock, the S&P 500 and the S&P 500 Financials for the five-year period ended December 31, 2021.

The graph assumes a $100 investment in our Class A common stock and both of the indices and the reinvestment of dividends.

Mastercard’s Class B common stock is not publicly traded or listed on any exchange or dealer quotation system.

Comparison of cumulative five-year total return


Total returns to stockholders for each of the years presented were as follows:

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | Base period | | | | | | Indexed Returns | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | For the Years Ended December 31, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Company/Index | | | | | | 2016 | | | | | | 2017 | | | | | | 2018 | | | | | | 2019 | | | | | | 2020 | | | | | | 2021 | | |

| Mastercard | | | | | | $ | 100.00 | | | | | $ | 147.68 | | | | | $ | 185.07 | | | | | $ | 294.55 | | | | | $ | 353.98 | | | | | $ | 358.07 | |

| S&P 500 | | | | | | 100.00 | | | | | | 121.83 | | | | | | 116.49 | | | | | | 153.17 | | | | | | 181.35 | | | | | | 233.41 | | |

| S&P 500 Financials | | | | | | 100.00 | | | | | | 122.18 | | | | | | 106.26 | | | | | | 140.40 | | | | | | 138.02 | | | | | | 186.38 | | |

42 MASTERCARD 2021 FORM 10-K

On [removed: November 30, 2021,] [added: December 6, 2022,] our Board of Directors declared a quarterly cash dividend of [removed: $0.49] [added: $0.57] per share paid on February 9, [removed: 2022] [added: 2023] to holders of record on January [removed: 7, 2022] [added: 9, 2023] of our Class A common stock and Class B common stock.

On February [removed: 8, 2022,] [added: 14, 2023,] our Board of Directors declared a quarterly cash dividend of [removed: $0.49] [added: $0.57] per share payable on May 9, [removed: 2022] [added: 2023] to holders of record on April [removed: 8, 2022] [added: 7, 2023] of our Class A common stock and Class B common stock.

During the fourth quarter of [removed: 2021,] [added: 2022,] we repurchased [removed: a total of 3.7] [added: 7.4] million shares for [removed: $1.3] [added: $2.4] billion at an average price of [removed: $342.86] [added: $328.26] per share of Class A common stock.

The following table presents our repurchase activity on a cash basis during the fourth quarter of [removed: 2021:][added: 2022:]

2In [removed: November 2021 and] December [removed: 2020,] [added: 2022 and November 2021,] our Board of Directors approved share repurchase programs [added: of our Class A common stock] authorizing us to repurchase up to [removed: $8.0] [added: $9.0] billion and [removed: $6.0 billion respectively, of our Class A common stock under each plan.][added: $8.0 billion, respectively.]

Our Class A common stock trades on the New York Stock Exchange under the symbol “MA”.

At February 8, 2023, we had 71 stockholders of record for our Class A common stock.

We believe that the number of beneficial owners is substantially greater than the number of record holders because a large portion of our Class A common stock is held in “street name” by brokers.

There is currently no established public trading market for our Class B common stock.

There were approximately 233 holders of record of our non-voting Class B common stock as of February 8, 2023, constituting approximately 0.8% of our total outstanding equity.

Stock Performance Graph

The graph and table below compare the cumulative total stockholder return of Mastercard’s Class A common stock, the S&P 500 and the S&P 500 Financials for the five-year period ended December 31, 2022.

The graph assumes a $100 investment in our Class A common stock and both of the indices and the reinvestment of dividends.

Mastercard’s Class B common stock is not publicly traded or listed on any exchange or dealer quotation system.

Comparison of cumulative five-year total return


Total returns to stockholders for each of the years presented were as follows:

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | Base period | | | | | | Indexed Returns | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | For the Years Ended December 31, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Company/Index | | | | | | 2017 | | | | | | 2018 | | | | | | 2019 | | | | | | 2020 | | | | | | 2021 | | | | | | 2022 | | |

| Mastercard | | | | | | $ | 100.00 | | | | | $ | 125.32 | | | | | $ | 199.46 | | | | | $ | 239.70 | | | | | $ | 242.47 | | | | | $ | 236.03 | |

| S&P 500 | | | | | | 100.00 | | | | | | 95.62 | | | | | | 125.72 | | | | | | 148.85 | | | | | | 191.58 | | | | | | 156.88 | | |

| S&P 500 Financials | | | | | | 100.00 | | | | | | 86.97 | | | | | | 114.91 | | | | | | 112.96 | | | | | | 152.54 | | | | | | 136.48 | | |

| October 1 – 31 | | | | | | 2,170,087 | | | | | | $ | 297.01 | | | | | 2,170,087 | | | | | | $ | 4,943,927,887 | |

| November 1 – 30 | | | | | | 2,444,959 | | | | | | $ | 333.87 | | | | | 2,444,959 | | | | | | $ | 4,127,621,138 | |

| December 1 – 31 | | | | | | 2,740,325 | | | | | | $ | 348.01 | | | | | 2,740,325 | | | | | | $ | 12,173,961,341 | |

| Total | | | | | | 7,355,371 | | | | | | $ | 328.26 | | | | | 7,355,371 | | | | | | | | |

| October 1 – 31 | | | | | | 1,282,075 | | | | | | $ | 351.18 | | | | | 1,282,075 | | | | | | $ | 4,752,404,601 | |

| November 1 – 30 | | | | | | 1,126,537 | | | | | | 340.52 | | | | | | 1,126,537 | | | | | | 12,368,795,391 | | |

| December 1 – 31 | | | | | | 1,312,321 | | | | | | 336.75 | | | | | | 1,312,321 | | | | | | 11,926,866,431 | | |

| Total | | | | | | 3,720,933 | | | | | | 342.86 | | | | | | 3,720,933 | | | | | | | | |

MASTERCARD [removed: 2021] [added: 2022] FORM 10-K [removed: 43][added: 44]

For discussion related to the results of operations for the year ended December 31, [removed: 2020] [added: 2021] compared to the year ended December 31, [removed: 2019,] [added: 2020,] please see Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, [removed: 2020.][added: 2021.]

[removed: Mastercard is a technology company in the global payments industry that connects] [added: We connect] consumers, financial institutions, merchants, governments, digital partners, businesses and other organizations [removed: worldwide,] [added: worldwide by] enabling [removed: them to use] electronic [removed: forms of payment] [added: payments] instead of cash and [removed: checks.][added: checks and making those payment transactions safe, simple, smart, and accessible.]

We operate a multi-rail payments network that provides choice and flexibility for [removed: consumers] [added: consumers, merchants] and [removed: merchants.][added: our customers.]

Our value-added services include, among others, cyber and intelligence solutions to allow all parties to transact easily and with confidence, as well as other services that provide proprietary insights, drawing on our principled use of [added: secure] consumer and merchant data.

Our franchise model sets the standards and ground-rules [added: for our core global payments network] that balance value and risk across all stakeholders and allows for interoperability among them.

The following tables provide a summary of [added: the growth] trends in our key [removed: metrics for 2021 and 2020 as compared to the respective year ago periods:][added: drivers.]

| | | | | | | [removed: 2021 Quarter ended] [added: Year ended December 31, 2021] | | | | | | | | | | | | | | | | | | | | | | | | [removed: Year ended December 31, 2021] | | | [added: | | | | | | | | | | | |]

| Switched transactions [removed: | | | | | | 9 | | % | | | | 41 | | % | | | | 25] [added: growth] | | [removed: %] | | | | [removed: 27] [added: 12%] | | [removed: %] | | | | [removed: 25] [added: 25%] | | [removed: %] |

| | | | | | | [removed: 2020 Quarter ended] [added: Year ended December 31, 2020] | | | | | | | | | | | | | | | | | | | | | | | | [removed: Year ended December 31, 2020] | | | [added: | | | | | | | | | | | |]

[removed: 44] [added: 45] MASTERCARD [removed: 2021] [added: 2022] FORM 10-K

The full extent to which [removed: the pandemic, and measures and actions taken by stakeholders in response, affect] [added: this matter affects] our business, results of operations and financial condition will depend on future developments, including the duration of the [removed: pandemic] [added: invasion] and [removed: its impact on] the [added: impacts on regional and] global [removed: economy,] [added: economies,] which are uncertain, and cannot be predicted at this time.

| | | | | | | Year ended December 31, | | | | | | | | | | | | | | | | | | [removed: 2021] [added: 2022] Increase/ (Decrease) | | | | | | [removed: 2020] [added: 2021] Increase/ (Decrease) | | |

| | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | | | | | | | | | |

| Net revenue | | | | | | $ | [removed: 18,884] [added: 22,237] | | | | | $ | [removed: 15,301] [added: 18,884] | | | | | $ | [removed: 16,883] [added: 15,301] | | | | | [removed: 23%] [added: 18%] | | | | | | [removed: (9)%] [added: 23%] | | |

| Operating expenses | | | | | | $ | [removed: 8,802] [added: 9,973] | | | | | $ | [removed: 7,220] [added: 8,802] | | | | | $ | [removed: 7,219] [added: 7,220] | | | | | [removed: 22%] [added: 13%] | | | | | | [removed: —%] [added: 22%] | | |

| Operating income | | | | | | $ | [removed: 10,082] [added: 12,264] | | | | | $ | [removed: 8,081] [added: 10,082] | | | | | $ | [removed: 9,664] [added: 8,081] | | | | | [removed: 25%] [added: 22%] | | | | | | [removed: (16)%] [added: 25%] | | |

| Operating margin | | | | | | [removed: 53.4] [added: 55.2] | | % | | | | [removed: 52.8] [added: 53.4] | | % | | | | [removed: 57.2] [added: 52.8] | | % | | | | [removed: 0.6] [added: 1.8] ppt | | | | | | [removed: (4.4)] [added: 0.6] ppt | | |

| Income tax expense | | | | | | $ | [removed: 1,620] [added: 1,802] | | | | | $ | [removed: 1,349] [added: 1,620] | | | | | $ | [removed: 1,613] [added: 1,349] | | | | | [removed: 20%] [added: 11%] | | | | | | [removed: (16)%] [added: 20%] | | |

| Effective income tax rate | | | | | | [removed: 15.7] [added: 15.4] | | % | | | | [removed: 17.4] [added: 15.7] | | % | | | | [removed: 16.6] [added: 17.4] | | % | | | | [removed: (1.7)] [added: (0.4)] ppt | | | | | | [removed: 0.8] [added: (1.7)] ppt | | |

| Net income | | | | | | $ | [removed: 8,687] [added: 9,930] | | | | | $ | [removed: 6,411] [added: 8,687] | | | | | $ | [removed: 8,118] [added: 6,411] | | | | | [removed: 35%] [added: 14%] | | | | | | [removed: (21)%] [added: 35%] | | |

| Diluted earnings per share | | | | | | $ | [removed: 8.76] [added: 10.22] | | | | | $ | [removed: 6.37] [added: 8.76] | | | | | $ | [removed: 7.94] [added: 6.37] | | | | | [removed: 38%] [added: 17%] | | | | | | [removed: (20)%] [added: 38%] | | |

| Diluted weighted-average shares outstanding | | | | | | [removed: 992] [added: 971] | | | | | | [removed: 1,006] [added: 992] | | | | | | [removed: 1,022] [added: 1,006] | | | | | | [removed: (1)%] [added: (2)%] | | | | | | [removed: (2)%] [added: (1)%] | | |

| | | | | | | Year ended December 31, | | | | | | | | | | | | | | | | | | [removed: 2021] [added: 2022] Increase/(Decrease) | | | | | | | | | | | | [removed: 2020] [added: 2021] Increase/(Decrease) | | | | | | | | |

| | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | As adjusted | | | | | | Currency-neutral | | | | | | As adjusted | | | | | | Currency-neutral | | |

| [removed: Net] [added: Adjusted net] revenue | | | | | | $ | [removed: 18,884] [added: 22,200] | | | | | $ | [removed: 15,301] [added: 18,884] | | | | | $ | [removed: 16,883] [added: 15,301] | | | | | [removed: 23%] [added: 18%] | | | | | | [removed: 22%] [added: 23%] | | | | | | [removed: (9)%] [added: 23%] | | | | | | [removed: (8)%] [added: 22%] | | |

| Adjusted operating expenses | | | | | | $ | [removed: 8,627] [added: 9,549] | | | | | $ | [removed: 7,147] [added: 8,627] | | | | | $ | [removed: 7,219] [added: 7,147] | | | | | [removed: 21%] [added: 11%] | | | | | | [removed: 19%] [added: 14%] | | | | | | [removed: (1)%] [added: 21%] | | | | | | [removed: (1)%] [added: 19%] | | |

| Adjusted operating margin | | | | | | [removed: 54.3] [added: 57.0] | | % | | | | [removed: 53.3] [added: 54.3] | | % | | | | [removed: 57.2] [added: 53.3] | | % | | | | [removed: 1.0] [added: 2.7] ppt | | | | | | [removed: 1.2] [added: 3.4] ppt | | | | | | [removed: (4.0)] [added: 1.0] ppt | | | | | | [removed: (3.7)] [added: 1.2] ppt | | |

| Adjusted effective income tax rate | | | | | | [removed: 15.4] [added: 15.7] | | % | | | | [removed: 17.2] [added: 15.4] | | % | | | | [removed: 17.0] [added: 17.2] | | % | | | | [removed: (1.8)] [added: 0.3] ppt | | | | | | [removed: (1.8)] [added: 0.5] ppt | | | | | | [removed: 0.2] [added: (1.8)] ppt | | | | | | [removed: 0.3] [added: (1.8)] ppt | | |

| Adjusted net income | | | | | | $ | [removed: 8,333] [added: 10,342] | | | | | $ | [removed: 6,463] [added: 8,333] | | | | | $ | [removed: 7,937] [added: 6,463] | | | | | [removed: 29%] [added: 24%] | | | | | | [removed: 28%] [added: 32%] | | | | | | [removed: (19)%] [added: 29%] | | | | | | [removed: (17)%] [added: 28%] | | |

| Adjusted diluted earnings per share | | | | | | $ | [removed: 8.40] [added: 10.65] | | | | | $ | [removed: 6.43] [added: 8.40] | | | | | $ | [removed: 7.77] [added: 6.43] | | | | | [removed: 31%] [added: 27%] | | | | | | [removed: 30%] [added: 34%] | | | | | | [removed: (17)%] [added: 31%] | | | | | | [removed: (16)%] [added: 30%] | | |

MASTERCARD [removed: 2021] [added: 2022] FORM 10-K [removed: 45][added: 46]

Key highlights for [removed: 2021] [added: 2022] as compared to [removed: 2020] [added: 2021] were as follows:

[removed: |] Net [removed: revenue | | | | | | | | | | | |][added: Revenue]

| GAAP | | | | | | Non-GAAP (currency-neutral) | | | [removed: Net revenue] [added: Adjusted operating expenses] increased [removed: 22%] [added: 14%] on a currency-neutral basis, which includes [removed: 2] [added: 4] percentage points of growth [removed: from] [added: due to] acquisitions. The remaining increase was primarily due [removed: to:] [added: to higher personnel costs, travel and meeting costs, and unfavorable foreign exchange activity.] | | |

| [added: Cross-border volume growth 1] | | | | | | [added: 33%] | | | [removed: \- Cross-border volume growth of] [added: | | | 45% | | | | | | 35% | | | | | |] 32% [removed: on a local currency basis] | | |

[removed: | | | | | | | | | |] [added: The remaining increase] was [removed: driven] primarily [added: driven] by our [removed: Cyber & Intelligence] [added: cyber] and [removed: Data & Services] [added: intelligence and data and services] solutions. [removed: | | |]