MA.12.31.2020 - 10-K

UNITEDSTATESSECURITIESANDEXCHANGECOMMISSION

Washington,D.C.20549

Form 10-K

☒ ANNUALREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934

ForthefiscalyearendedDecember31,2020

Or☐ TRANSITIONREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934

Forthetransitionperiodfromto

Commissionfilenumber:001-32877

MastercardIncorporated(Exactnameofregistrantasspecifiedinitscharter)

Delaware 13-4172551(Stateorotherjurisdictionofincorporationororganization)

(IRSEmployerIdentificationNumber)

2000PurchaseStreetPurchase, NY 10577

(Addressofprincipalexecutiveoffices) (ZipCode)

(914)249-2000(Registrant’stelephonenumber,includingareacode)

SecuritiesregisteredpursuanttoSection12(b)oftheAct:

Titleofeachclass TradingSymbol Nameofeachexchangeofwhichregistered

ClassACommonStock,parvalue$0.0001pershare MA NewYorkStockExchange

1.1%Notesdue2022 MA22 NewYorkStockExchange



SecuritiesregisteredpursuanttoSection12(g)oftheAct:

ClassBcommonstock,parvalue$0.0001pershare

Indicatebycheckmarkiftheregistrantisawell-knownseasonedissuer,asdefinedinRule405oftheSecuritiesAct. Yes ☒ No ☐IndicatebycheckmarkiftheregistrantisnotrequiredtofilereportspursuanttoSection13orSection15(d)oftheAct. Yes ☐ No ☒Indicatebycheckmarkwhethertheregistrant(1)hasfiledallreportsrequiredtobefiledbySection13or15(d)oftheSecuritiesExchangeActof1934duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtofilesuchreports),and(2)hasbeensubjecttosuchfilingrequirementsforthepast90days. Yes ☒ No ☐IndicatebycheckmarkwhethertheregistranthassubmittedelectronicallyeveryInteractiveDataFilerequiredtobesubmittedpursuanttoRule405ofRegulationS-T(§232.405ofthischapter)duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtosubmitsuchfiles). Yes ☒ No ☐

Indicatebycheckmarkwhethertheregistrantisalargeacceleratedfiler,anacceleratedfiler,anon-acceleratedfiler,asmallerreportingcompany,oranemerginggrowthcompany.Seethedefinitionsof“largeacceleratedfiler,”“acceleratedfiler,”“smallerreportingcompany,”and“emerginggrowthcompany”inRule12b-2oftheExchangeAct.(CheckOne):Largeacceleratedfiler ☒ Acceleratedfiler ☐Non-acceleratedfiler ☐ (donotcheckifasmallerreportingcompany) Smallerreportingcompany ☐

Emerginggrowthcompany ☐Ifanemerginggrowthcompany,indicatebycheckmarkiftheregistranthaselectednottousetheextendedtransitionperiodforcomplyingwithanyneworrevisedfinancialaccountingstandardsprovidedpursuanttoSection13(a)oftheExchangeAct. ☐Indicatebycheckmarkwhethertheregistranthasfiledareportonandattestationtoitsmanagement’sassessmentoftheeffectivenessofitsinternalcontroloverfinancialreportingunderSection404(b)oftheSarbanes-OxleyAct(15U.S.C.7262(b))bytheregisteredpublicaccountingfirmthatpreparedorissueditsauditreport. ☒Indicatebycheckmarkwhethertheregistrantisashellcompany(asdefinedinRule12b-2oftheAct). Yes ☐ No ☒Theaggregatemarketvalueoftheregistrant’sClassAcommonstock,parvalue$0.0001pershare,heldbynon-affiliates(usingtheNewYorkStockExchangeclosingpriceasofJune30,2020,thelastbusinessdayoftheregistrant’smostrecentlycompletedsecondfiscalquarter)wasapproximately$261.3billion.Thereiscurrentlynoestablishedpublictradingmarketfortheregistrant’sClassBcommonstock,parvalue$0.0001pershare.AsofFebruary9,2021,therewere985,146,914sharesoutstandingoftheregistrant’sClassAcommonstock,parvalue$0.0001pershareand8,215,424sharesoutstandingoftheregistrant’sClassBcommonstock,parvalue$0.0001pershare.

Portionsoftheregistrant’sdefinitiveproxystatementforthe2021AnnualMeetingofStockholdersareincorporatedbyreferenceintoPartIIIhereof.

MASTERCARDINCORPORATEDFISCALYEAR2020FORM10-KANNUALREPORT

TABLEOFCONTENTS

PARTI 6 Item1. Business

20 Item1A. Riskfactors

33 Item1B. Unresolvedstaffcomments

33 Item2. Properties

33 Item3. Legalproceedings

33 Item4. Minesafetydisclosures

34 - Informationaboutourexecutiveofficers

PARTII 38 Item5. Marketforregistrant’scommonequity,relatedstockholdermattersandissuerpurchasesofequitysecurities

40 Item6. Selectedfinancialdata

41 Item7. Management’sdiscussionandanalysisoffinancialconditionandresultsofoperations

55 Item7A. Quantitativeandqualitativedisclosuresaboutmarketrisk

56 Item8. Financialstatementsandsupplementarydata

105 Item9. Changesinanddisagreementswithaccountantsonaccountingandfinancialdisclosure

105 Item9A. Controlsandprocedures

105 Item9B. OtherInformation

PARTIII 107 Item10. Directors,executiveofficersandcorporategovernance

107 Item11. Executivecompensation

107 Item12. Securityownershipofcertainbeneficialownersandmanagementandrelatedstockholdermatters

107 Item13. Certainrelationshipsandrelatedtransactions,anddirectorindependence

107 Item14. Principalaccountantfeesandservices

PARTIV 109 Item15. Exhibitsandfinancialstatementschedules

109 Item16. Form10-Ksummary

MASTERCARD2020FORM10-K3

In this Report on Form 10-K (“Report”), references to the “Company,” “Mastercard,” “we,” “us” or “our” refer to the businessconductedbyMastercardIncorporatedanditsconsolidatedsubsidiaries,includingouroperatingsubsidiary,MastercardInternationalIncorporated,andtotheMastercardbrand.

Forward-LookingStatementsThisReportcontainsforward-lookingstatementspursuanttothesafeharborprovisionsofthePrivateSecuritiesLitigationReformActof1995.Allstatementsotherthanstatementsofhistoricalfactsmaybeforward-lookingstatements.WhenusedinthisReport,thewords“believe”,“expect”,“could”,“may”,“would”,“will”,“trend”andsimilarwordsareintendedtoidentifyforward-lookingstatements.Examplesofforward-lookingstatementsinclude,butarenotlimitedto,statementsthatrelatetotheCompany’sfutureprospects,developmentsandbusinessstrategies.

Manyfactorsanduncertaintiesrelatingtoouroperationsandbusinessenvironment,allofwhicharedifficulttopredictandmanyofwhich are outside of our control, influencewhether any forward-looking statements can orwill be achieved. Any one of thosefactors could cause our actual results to differ materially from those expressed or implied in writing in any forward-lookingstatementsmadebyMastercardoronitsbehalf,including,butnotlimitedto,thefollowingfactors:

• regulation directly related to the payments industry (including regulatory, legislative and litigation activity with respect tointerchangeratesandsurcharging)

• theimpactofpreferentialorprotectivegovernmentactions

• regulationofprivacy,data,securityandthedigitaleconomy

• regulation that directly or indirectly applies to us based on our participation in the global payments industry (including anti-moneylaundering,counterfinancingofterrorism,economicsanctionsandanti-corruption;account-basedpaymentsystems;andissuerpracticelegislationandregulation)

• theimpactofchangesintaxlaws,aswellasregulationsandinterpretationsofsuchlawsorchallengestoourtaxpositions

• potentialorincurredliabilityandlimitationsonbusinessrelatedtoanylitigationorlitigationsettlements

• theimpactoftheglobalcoronavirus(COVID-19)pandemicandcontainmentmeasurestakeninresponse

• theimpactofcompetitionintheglobalpaymentsindustry(includingdisintermediationandpricingpressure)

• thechallengesrelatingtorapidtechnologicaldevelopmentsandchanges

• the challenges relating tooperatinga real-timeaccount-basedpayment systemand toworkingwithnewcustomersandendusers

• theimpactofinformationsecurityincidents,accountdatabreachesorservicedisruptions

• issues related to our relationships with our customers (including loss of substantial business from significant customers,competitorrelationshipswithourcustomersandbankingindustryconsolidation),merchantsandgovernments

• exposuretolossorilliquidityduetoourroleasguarantorandothercontractualobligations

• theimpactofglobaleconomic,political,financialandsocietaleventsandconditions,includingadversecurrencyfluctuationsandforeignexchangecontrols

• reputationalimpact,includingimpactrelatedtobrandperceptionandlackofvisibilityofourbrandsinproductsandservices

• theinabilitytoattract,hireandretainahighlyqualifiedanddiverseworkforce,ormaintainourcorporateculture

• issuesrelatedtoacquisitionintegration,strategicinvestmentsandentryintonewbusinesses

• issuesrelatedtoourClassAcommonstockandcorporategovernancestructure

Pleasesee“RiskFactors”inPartI,Item1Aforacompletediscussionoftheseriskfactors.Wecautionyouthattheimportantfactorsreferencedabovemaynotcontainallofthefactorsthatareimportanttoyou.Ourforward-lookingstatementsspeakonlyasofthedateofthisReportorasofthedatetheyaremade,andweundertakenoobligationtoupdateourforward-lookingstatements.

4MASTERCARD2020FORM10-K

PARTIItem1.Business

Item1A.Riskfactors

Item1B.Unresolvedstaffcomments

Item2.Properties

Item3.Legalproceedings

Item4.Minesafetydisclosures

Informationaboutourexecutiveofficers

Item1.Business

OverviewMastercard is a technology company in the global payments industry that connects consumers, financial institutions,merchants,governments, digital partners, businesses andother organizationsworldwide, enabling them touse electronic formsof paymentinstead of cash and checks. Wemake payments easier andmore efficient by providing awide range of payment solutions andservicesusingourfamilyofwell-knownbrands,includingMastercard®,Maestro®andCirrus®.Weoperateamulti-railnetworkthatofferscustomersonepartnertoturntofortheirdomesticandcross-borderpaymentneeds.Throughouruniqueandproprietaryglobalpaymentsnetwork,whichwerefertoasourcorenetwork,weswitch(authorize,clearandsettle)paymenttransactionsanddeliver related products and services. We have additional payment capabilities that include automated clearing house (“ACH”)transactions(bothbatchandreal-timeaccount-basedpayments). Wealsoprovideintegratedvalue-addedofferingssuchascyberandintelligenceproducts,informationandanalyticsservices,consulting,loyaltyandrewardprograms,processingandopenbanking.Ourpaymentsolutionsoffercustomerschoiceandflexibilityandaredesignedtoensuresafetyandsecurityfortheglobalpaymentssystem.

Atypicaltransactiononourcorenetworkinvolvesfourparticipantsinadditiontous:accountholder(apersonorentitywhoholdsacardorusesanotherdeviceenabled forpayment), issuer (theaccountholder’s financial institution),merchantandacquirer (themerchant’sfinancial institution). Wedonot issuecards,extendcredit,determineorreceiverevenuefrominterestratesorotherfeeschargedtoaccountholdersbyissuers,orestablishtherateschargedbyacquirersinconnectionwithmerchants’acceptanceofourproducts.Inmostcases,accountholderrelationshipsbelongto,andaremanagedby,ourcustomers.

Wegeneraterevenuesfromassessingourcustomersbasedonthegrossdollarvolume(“GDV”)ofactivityontheproductsthatcarryourbrands,fromthefeeswechargetoourcustomersforprovidingtransactionswitchingandfromotherpayment-relatedproductsandservices.

Forafulldiscussionofourbusiness,pleaseseepage8.

OurPerformanceThefollowingareourkeyfinancialandoperationalhighlightsfor2020,includinggrowthratesovertheprioryear:

GAAP

Netrevenue Netincome DilutedEPS

$15.3B $6.4B $6.37down9% down21% down20%

Non-GAAP1(currency-neutral)

Netrevenue Adjustednetincome AdjusteddilutedEPS

$15.3B $6.5B $6.43down8% down17% down16%

$6.1B $4.5B Repurchasedshares $7.2Bincapitalreturnedtostockholders

$1.6B Dividendspaid cashflowsfromoperations

Grossdollarvolume(growthonalocalcurrencybasis)

Cross-bordervolumegrowth(onalocalcurrencybasis) Switchedtransactions

$6.3T down29% 90.1Bflat up3%

1 Non-GAAP resultsexclude the impactof gainsand lossesonequity investments, Special Itemsand/or foreign currency. See “Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperations-FinancialResultsOverview”inPartII,Item7forthereconciliationtothemostdirectcomparableGAAPfinancialmeasures.

PARTIITEM1.BUSINESS


Thecoronavirus(“COVID-19”)outbreakanditsnegativeimpactontheglobaleconomyaffectedour2020performance,duringwhichwesawunfavorabletrendscomparedtohistoricalperiods.Forafulldiscussionofthisimpact,see“Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperation”inItemII,Part7.

OurStrategyWegrow,diversifyandbuildourbusinessthroughacombinationoforganicandinorganicstrategicinitiatives.Ourabilitytogrowourbusinessisinfluencedby:

• personalconsumptionexpenditure(“PCE”)growth

• drivingcashandchecktransactionstowardelectronicformsofpayment

• increasingourshareinthepaymentsspace

• providingintegratedvalue-addedproductsandservices

• providingenhancedpaymentcapabilitiestocapturenewpaymentflows,suchasbusinesstobusiness(“B2B”),persontoperson(“P2P”),businesstoconsumer(“B2C”)andgovernmentpayments.

GROW DIVERSIFY BUILDCORE CUSTOMERSANDGEOGRAPHIES NEWAREAS

CreditDebit

CommercialPrepaid

Digital-PhysicalConvergenceAcceptance

FinancialInclusionNewMarketsBusinesses

GovernmentsMerchants

DigitalPlayersLocalSchemes/Switches

DataAnalyticsConsulting

MarketingServicesLoyalty

CyberandIntelligenceProcessing

NewPaymentFlowsOpenBanking

ENABLEDBYBRAND,DATA,TECHNOLOGYANDPEOPLE

Grow.Wefocusongrowingourcorebusinessglobally,includinggrowingourconsumerandcommercialproductsandsolutions,aswell as increasing the number of payment transactions we switch. We also look to provide effective and efficient paymentssolutions that cater to the evolvingways people interact and transact in the growing digital economy. This includes expandingmerchant access to electronic payments through new technologies in an effort to deliver a better consumer experience, whilecreatinggreaterefficienciesandsecurity.

Diversify.Wediversifyourbusinessby:

• working with new customers, including governments, merchants, financial technology companies (fintechs), digital players,mobileprovidersandothercorporatebusinesses

• scaling our capabilities and business into new geographies, including growing acceptance in markets with limited electronicpaymentsacceptancetoday

• broadeningfinancialinclusionfortheunbankedandunderbanked

Build.Webuildourbusinessby:

• creatingandacquiringdifferentiatedproductsandplatformstoprovideunique,innovativesolutionsthatwebringtomarkettosupport newpayment flows and related applications, such as real-time account-basedpayments and theMastercard Track™suiteofproducts

• providingservicesacrossdataanalytics,consulting,marketingservices,loyalty,cyberandintelligence,andprocessing

• providingopenbankingcapabilitiestoenablethereliableaccess,transmissionandmanagementofconsumer-consenteddata

StrategicPartners.Weworkwithavarietyofstakeholders.Weprovidefinancialinstitutionswithsolutionstohelpthemincreaserevenuebydrivingpreference forourproducts and services. Wehelpmerchants, financial institutions, governments, andotherorganizations by delivering data-driven insights and other services that help them grow and create simple and secure customer

PARTIITEM1.BUSINESS


experiences.Wepartnerwithtechnologycompaniessuchasdigitalplayers,fintechsandmobileproviderstodeliverdigitalpaymentsolutionspoweredbyourtechnology,expertiseandsecurityprotocols.Wehelpnationalandlocalgovernmentsimprovefinancialinclusionandefficiencies,reducecosts,increasetransparencyoffinancialtransactionsanddatatoreducecrimeandcorruptionandadvance social programs. For consumers, we provide faster, safer and more convenient ways to pay and transfer funds andexchangeinformationtoenableservices.

TalentandCulture.Oursuccessisdrivenbytheskills,experience,integrityandmindsetofthetalentwehire.Weattractandretaintoptalentfromdiversebackgroundsandindustriesbybuildingaworld-classculturebasedondecency,respectandinclusionwherepeoplehaveopportunitiestoperformpurpose-drivenworkthatimpactscustomers,communitiesandco-workersonaglobalscale.Thediversityandskillsetsofourpeopleunderpineverythingwedo.

OurBusiness

OurOperationsandNetwork

Weoperateamulti-railnetworkthatoffersourcustomersonepartnertoturntofortheirdomesticandcross-borderneeds.Ourcorenetworklinksissuersandacquirersaroundtheglobetofacilitatetheswitchingoftransactions,permittingaccountholderstouseaMastercardproductatmillionsofacceptancelocationsworldwide.Ourcorenetworkfacilitatesanefficientandsecuremeansfor receiving payments, a convenient, quick and secure paymentmethod for consumers to access their funds and a channel forbusinesses to receive insight through information that is derived from our network. We enable transactions for our customersthroughourcorenetwork inmorethan150currenciesand inmorethan210countriesandterritories. Our rangeofcapabilitiesextendbeyondourcorenetworkintoreal-timeaccount-basedpaymentsandopenbanking.

Core Network Transactions. Our core network supports what is often referred to as a “four-party” payments network. Thefollowingdiagramdepictsatypicaltransactiononourcorenetwork,andourroleinthattransaction:

Inatypicaltransaction,anaccountholderpurchasesgoodsorservicesfromamerchantusingoneofourpaymentproducts.Afterthetransactionisauthorizedbytheissuer,theissuerpaystheacquireranamountequaltothevalueofthetransaction,minustheinterchangefee(describedbelow),andthenpoststhetransactiontotheaccountholder’saccount.Theacquirerpaystheamountofthepurchase,netofadiscount(referredtoasthe“merchantdiscount”rate),tothemerchant.

• Interchange Fees. Interchange fees reflect the valuemerchants receive from accepting our products and play a key role inbalancingthecostsandbenefitsthatconsumersandmerchantsderive.Generally,interchangefeesarecollectedfromacquirersandpaidtoissuerstoreimbursetheissuersforaportionofthecostsincurred.Thesecostsareincurredbyissuersinprovidingservices that benefit all participants in the system, including acquirers and merchants, whose participation in the networkenablesincreasedsalestotheirexistingandnewcustomers,efficienciesinthedeliveryofexistingandnewproducts,guaranteedpaymentsandimprovedexperienceforthecustomers.We(or,alternatively,financialinstitutions)establish“defaultinterchangefees” that apply when there are no other established settlement terms in place between an issuer and an acquirer. Weadministerthecollectionandremittanceofinterchangefeesthroughthesettlementprocess.

PARTIITEM1.BUSINESS


• Additional Four-Party System Fees. The merchant discount rate is established by the acquirer to cover its costs of bothparticipatinginthefour-partysystemandprovidingservicestomerchants.Theratetakesintoconsiderationtheamountoftheinterchangefeewhichtheacquirergenerallypaystotheissuer. Additionally,acquirersmaychargemerchantsprocessingandrelated fees in addition to the merchant discount rate. Issuers may also charge account holders fees for the transaction,including,forexample,feesforextendingrevolvingcredit.

SwitchedTransactions

• Authorization,ClearingandSettlement.Throughourcorenetwork,weenabletheroutingofatransactiontotheissuerforitsapproval, facilitate the exchange of financial transaction information between issuers and acquirers after a successfullyconductedtransaction,andhelptosettlethetransactionbyfacilitatingtheexchangeof fundsbetweenpartiesviasettlementbankschosenbyusandourcustomers.

• Cross-Border andDomestic. Our core network switches transactions throughout theworldwhen themerchant country andcountryofissuancearedifferent(“cross-bordertransactions”),providingaccountholderswiththeabilitytouse,andmerchantstoaccept,ourproductsandservicesacrosscountryborders.Wealsoprovideswitchedtransactionservicestocustomerswherethe merchant country and the country of issuance are the same (“domestic transactions”). We switch over 55% of alltransactionsforMastercardandMaestro-brandedcards,includingnearlyallcross-bordertransactions.WeswitchthemajorityofMastercardandMaestro-brandeddomestic transactions in theUnitedStates,UnitedKingdom,Canada,Brazil anda selectnumberofothercountries.

CoreNetworkArchitecture.Ourcorenetworkfeaturesagloballyintegratedstructurethatprovidesscaleforourissuers,enablingthemtoexpandintoregionalandglobalmarkets.Itisbasedlargelyonadistributed(peer-to-peer)architecturewithanintelligentedge that enables the network to adapt to the needs of each transaction. Our core network accomplishes this by performingintelligent routing and applying multiple value-added services (such as fraud scoring, tokenization services, etc.) to appropriatetransactions in real time. Our core network’s architecture enables us to connect all parties regardless of where or how thetransactionisoccurring.Ithas24-houradayavailabilityandworld-classresponsetime.

Real-timeAccount-based Payment Infrastructure andApplications. Augmenting our core network,we offer real-time account-basedpaymentcapabilities,enablingpaymentsbetweenbankaccountsinreal-timeincountriesinwhichithasbeendeployed.

Open Banking. We offer a platform that enables data providers and third parties to reliably access, securely transmit andconfidentlymanagecustomer-consenteddatatoimprovethecustomerexperience.

PaymentsSystemSecurity.Ourpaymentsolutionsandproductsaredesignedtoensuresafetyandsecurityfortheglobalpaymentssystem.Ourcorenetworkandadditionalplatformsincorporatemultiplelayersofprotection,providinggreaterresiliencyandbest-in-classsecurityprotection. Ourprogramsareassessedbythirdpartiesand incorporatebenchmarkingandotherdatafrompeercompanies and consultants. We engage in many efforts to mitigate information security challenges, including maintaining aninformationsecurityprogram,anenterpriseresilienceprogramandinsurancecoverage,aswellasregularlytestingoursystemstoaddresspotentialvulnerabilities.ThroughthecombinedeffortsofourSecurityOperationsCenters,FusionCentersandMastercardIntelligence Center, we work with experts across the organization (as well as through other sources such as public-privatepartnerships),tomonitorandrespondquicklytoarangeofcyberandphysicalthreats.

As part of ourmulti-layered approach to protect the global payments system,we alsoworkwith issuers, acquirers,merchants,governments and payments industry associations to help develop and put in place standards (e.g., EMV) for safe and securetransactions.

DigitalPayments.Ournetworksupportsandenablesourdigitalpaymentplatforms,productsandsolutions,reflectingthegrowingdigitaleconomywhereconsumersareincreasinglyseekingtousetheirpaymentaccountstopaywhen,whereandhowtheywant.For a full discussion of the ways our innovation capabilities enable digital payments, see “Our Products and Services - DigitalEnablement”below.

CustomerRisk. Weguaranteethesettlementofmanyofthetransactionsfromissuerstoacquirerstoensuretheintegrityofourcorenetwork.Werefertotheamountofthisguaranteeasoursettlementexposure.Wedonot,however,guaranteepaymentstomerchantsbytheiracquirersortheavailabilityofunspentprepaidaccountholderaccountbalances.

OurFranchise. Wemanageanecosystemof stakeholderswhoparticipate inournetwork. Our franchisecreatesandsustainsacomprehensive series of value exchanges across our ecosystem.We ensure a balanced ecosystemwhere all participants benefitfromtheavailability,innovationandsafetyandsecurityofournetwork.Weachievethisthroughthefollowingkeyactivities:

• Participant Onboarding. We ensure the capability of new customers to use our network, and define the roles andresponsibilitiesfortheiroperationsonceonthenetwork

PARTIITEM1.BUSINESS


• SafetyandSecurity.Weestablishthecoreprinciples,includingensuringconsumerprotectionsandintegrity,soparticipantsfeelconfidenttotransactonthenetwork.

• OperatingStandards.Wedefinetheoperational,technicalandfinancialpoliciestowhichnetworkparticipantsarerequiredtoadhere.

• Responsible Stewardship. Weestablishperformance standards to supportecosystemgrowthandoptimizationandestablishproactivemonitoringtoensureparticipantperformance.

• IssueResolution.Weoperateaframeworktoenabletheresolutionofdisputesforbothcustomersandconsumers.

OurProductsandServices

Weprovide awide variety of integrated products and services that support products that customers can offer to their accountholders and merchants. These offerings facilitate transactions across our multi-rail payment network among account holders,merchants,financialinstitutions,businesses,governmentsandotherorganizationsinmarketsglobally.

CorePaymentProducts

ConsumerCredit. Weofferanumberofproductsthatenable issuerstoprovideconsumerswithcredit thatallowthemtodeferpayment.Theseprogramsaredesignedtomeettheneedsofourcustomersaroundtheworldandaddressstandard,premiumandaffluentconsumersegments.

ConsumerDebit. We support a range of payment products and solutions that allow our customers to provide consumerswithconvenientaccesstofundsindepositandotheraccounts.Ourdebitanddepositaccessprogramscanbeusedtomakepurchasesand to obtain cash in bankbranches, at ATMs and, in some cases, at the point of sale. Our brandeddebit programs consist ofMastercard(includingstandard,premiumandaffluentofferings),Maestro(theonlyPIN-basedsolutionthatoperatesglobally)andCirrus(ourprimaryglobalcashaccesssolution).

Prepaid. Prepaid accounts are a type of electronic payment that enables consumers to pay in advance whether or not theypreviouslyhadabankaccountoracredithistory.Theseaccountscanbetailoredtomeetspecificprogram,customerorconsumerneeds,suchaspayingbills,sendingperson-to-personpaymentsorwithdrawingcashfromanATM. Ourfocusrangesfromdigitalaccounts(suchasfintechandgigeconomyplatforms)tobusinessprogramssuchasemployeepayroll,healthsavingsaccountsandsolutions for small business owners). Our prepaid programs also offer opportunities in the private and public sectors to drivefinancialinclusionofpreviouslyunbankedindividualsthroughsocialsecuritypayments,unemploymentbenefitsandsalarycards.

PARTIITEM1.BUSINESS


Wealsoprovideprepaidprogrammanagementservices,primarilyoutsideoftheUnitedStates,thatprovideprocessingandend-to-endservicesonbehalfofissuersordistributorpartnerssuchasairlines,foreignexchangebureausandtravelagents.

CommercialCreditandDebit.Weoffercommercialcreditanddebitpaymentproductsandsolutionsthatmeetthepaymentneedsof large corporations,midsize companies, small businesses and government entities. Our solutions streamlineprocurement andpaymentprocesses,manageinformationandexpenses(suchastravelandentertainment)andreduceadministrativecosts.Ourcardofferings include travel, small business (debit and credit), purchasingand fleet cards. Our SmartDataplatformprovidesexpensemanagementand reporting capabilities. OurMastercard InControl™platformgenerates virtual accountnumberswhichprovidebusinesseswithenhancedcontrols,moresecurityandbetterdata.OurMastercardTrackBusinessPaymentService™(TrackBPS)isaimedatimprovingthewaybusinessespayandgetpaidbyprovidingasingleconnectionenablingaccesstomultiplepaymentrails,greatercontrolandricherdatatooptimizeB2Btransactionsforbothbuyersandsuppliers.

ThefollowingchartprovidesGDVandnumberofcardsfeaturingourbrandsin2020forselectprogramsandsolutions:

YearEndedDecember31,2020 AsofDecember31,2020

GDV Cards

(inbillions) Growth(Local) %ofTotalGDV (inmillions)

PercentageIncreasefromDecember31,

2019

Mastercard-brandedPrograms1,2

ConsumerCredit $ 2,425 (7)% 38% 894 2%

ConsumerDebitandPrepaid 3,230 8% 51% 1,338 11%

CommercialCreditandDebit 682 (6)% 11% 102 22%1 ExcludesMaestroandCirruscardsandvolumegeneratedbythosecards.2 Prepaidincludesbothconsumerandcommercialprepaid.

NewPaymentProductsandOpenBanking

In addition to the switching capabilities of our core network, we offer platforms with payment capabilities that support newpaymentflowsandrelatedapplications:

• Weofferreal-timeaccount-basedpaymentsforACHtransactions. Thisplatformenablespaymentsbetweenbankaccounts inrealtimeandprovidesenhanceddataandmessagingcapabilities.

• Weofferapplicationsincludingthosethatmakeiteasierforconsumerstoview,manageandpaytheirbillseitherwithcardsorreal-time and batch ACH payments from their bank accounts, and that enable consumers, businesses, governments andmerchantstosendandreceivemoneybeyondborderswithgreaterspeedandease.

• We offer an open banking platform that allows data providers and third parties to reliably access, securely transmit andconfidentlymanagecustomer-consenteddatatoimprovethecustomerexperience.

Value-AddedProductsandServices

CyberandIntelligence.Weofferintegratedproductsandservicestoprevent,detectandrespondtofraudandcyber-attacksandtoensurethesafetyoftransactionsmadeusingMastercardproducts.Wedothisusingamulti-layeredsafetyandsecuritystrategy:

• The“Prevent”layerprotectsinfrastructure,devicesanddatafromattacks.WehavecontinuedtogrowglobalusageofEMVchipandcontactlesssecuritytechnology,helpingtoreducefraud.GreaterusageofthistechnologyhasincreasedthenumberofEMVcardsissuedandthetransactionvolumeonEMVcards.

• The “Identify” layer allowsus tohelpbanksandmerchants verify theauthenticityof consumersduring thepaymentprocessusingvariousbiometrictechnologies,includingfingerprint,faceandirisscanningtechnologytoverifyonlinepurchasesonmobiledevices,aswellasacardwithbiometrictechnologybuiltin.

• The “Detect” layer spots fraudulent behavior and cyber-attacks and takes action to stop these activities oncedetected. Ourofferingsinthisspaceincludealertswhenaccountsareexposedtodatabreachesorsecurityincidents,fraudscoringtechnologythatscansbillionsofdollarsofmoneyflowseachdaywhileincreasingapprovalsandreducingfalsedeclines,andnetwork-levelmonitoringonaglobalscaletohelpidentifytheoccurrenceofwidespreadfraudattackswhenthecustomer(ortheirprocessor)maybeunabletodetectordefendagainstthem.

• The“Experience”layerimprovesthesecurityexperienceforourstakeholdersinareasfromthespeedoftransactions,enhancingapprovalsforonlineandcard-on-filepayments,totheabilitytodifferentiatelegitimateconsumersfromfraudulentones. Ourofferingsinthisspaceincludesolutionsforconsumeralertsandcontrolsandasuiteofdigitaltokenservices.Wealsoofferane-

PARTIITEM1.BUSINESS


commerce fraud and disputemanagement network that enablesmerchants to stop delivery when a fraudulent or disputedtransaction is identified,and issuerstorefundthecardholdertoavoidthechargebackprocess. Moreover,weuseourAIanddata analytics, along with our cyber risk assessment capabilities, to help financial institutions, merchants, corporations andgovernmentssecuretheirdigitalassets

Wehavealsoworkedwithourcustomerstoprovideproductstoconsumersgloballywithincreasedconfidencethroughthebenefitof“zeroliability”,wheretheconsumerbearsnoresponsibilityforcounterfeitorlostcardlossesintheeventoffraud.

LoyaltyandRewards. Wehavebuiltascalablerewardsplatformthatenablescustomerstoprovideconsumerswithavarietyofbenefits and services, such as personalized offers and rewards, access to a global airline lounge network, concierge services,insurance services, emergency card replacement, emergency cash advances and a 24-hour account holder service center. Formerchants,weprovide campaignswith targetedoffers and rewards,management services forpublishingoffers, andacceleratedpoints programs for co-brand and rewards program members. We also provide a loyalty platform that enables strongerrelationshipswithretailers,restaurants,airlinesandconsumerpackagedgoodscompaniesbycreatingexperiencesthatdriveloyaltyandimpactfulconsumerengagement.

Processing. We extend our processing capabilities in the payments value chain in various regions and across the globewith anexpandedsuiteofofferings,including:

• Issuersolutionsdesignedtoprovidecustomerswithacompleteprocessingsolutiontohelpthemcreatedifferentiatedproductsandservicesandallowquickdeploymentofpaymentsportfoliosacrossbankingchannels.

• Paymentgatewaysthatofferasingleinterfacetoprovidee-commercemerchantswiththeabilitytoprocesssecureonlineandin-apppaymentsandoffervalue-addedsolutions, includingoutsourcedelectronicpayments, fraudpreventionandalternativepaymentoptions.

• Mobilegatewaysthatfacilitatetransactionroutingandprocessingformobile-initiatedtransactions.

DataAnalyticsandConsulting. Weprovideproprietaryanalysis,data-drivenconsultingandmarketing services solutions tohelpclientsoptimize,streamlineandgrowtheirbusinesses,aswellasdelivervaluetoconsumers.

Our capabilities incorporate payments expertise and analytical and executional skills to create end-to-end solutions which areincreasingly delivered via platforms embedded in our customers’ day-to-day operations. By observing patterns of paymentsbehaviorbasedonbillionsoftransactionsswitchedglobally,weleverageanonymizedandaggregatedinformationandaconsultativeapproachtohelpourcustomersmakebetterbusinessdecisions. Ourexecutionalskillssuchasmarketing,digital implementationandprogrammanagementallowustoassistcustomerstoimplementactionsbasedontheseinsights.

Weutilize our expertise and tools to collaboratewith, and increasingly drive, innovation at financial institutions,merchants andgovernments. Through our global innovation and development arm, Mastercard Labs, we offer “Launchpad,” a five-day appprototypingworkshop,aswellasothercustomizedinnovationprogramssuchasin-labusabilitytestingandconceptdesign.ThroughourTest&Learnsoftwareasaserviceplatform,wecanhelpourcustomersconductdisciplinedbusinessexperimentsforin-marketteststodrivemoreprofitabledecisionmaking.

DigitalEnablement

Our innovation capabilities enable broader reach to scale digital payment services beyond cards tomultiple channels, includingmobile devices, and our standards, services and governance model help us to serve as the connection that allows financialinstitutions,fintechsandtechnologycompaniestointeroperateandenableconsumerstoengagethroughdigitalchannels:

• Deliveringbetterdigitalexperienceseverywhere.Weareusingourtechnologiesandsecurityprotocolstodevelopsolutionstomakedigitalshoppingandsellingexperiences,suchasonsmartphonesandotherconnecteddevices,simpler,fasterandsaferforbothconsumersandmerchants.Wealsoofferproductsthatmakeiteasierformerchantstoacceptpaymentsandexpandtheircustomerbase,aswellasproductsandpracticestofacilitateacceptanceviamobiledevices.

• Securingmoretransactions.Weareleveragingtokenization,biometricsandmachinelearningtechnologiesinourpushtosecureeverytransaction.TheseeffortsincludedrivingEMV-levelsecurityandbenefitsthroughallourpaymentchannels.

• Digitizingpersonalandbusinesspayments. Weprovidesolutionsthatenableourcustomerstoofferconsumerstheability tosend and receive money quickly and securely domestically and around the world. These solutions allow our customers toaddress new payment flows from any funding source, such as cash, card, bank account or mobile money account, to anydestinationglobally,securelyandofteninrealtime.

• Simplifyingaccessto,andintegrationof,ourdigitalassets.OurMastercardDeveloperplatformmakesiteasyforcustomersandpartnerstoleverageourmanydigitalassetsandservices. Byprovidingasingleaccesspointwithtoolsandcapabilitiestofindwhat we believe are some of the best-in-class Application Program Interfaces (“APIs”) across a broad range of Mastercardservices,weenableeasyintegrationofourservicesintonewandexistingsolutions.

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• Identifyingandexperimentingwithfuturetechnologies,start-upsandtrends. ThroughMastercardLabs,wecontinuetobringcustomers and partners access to thought leadership, innovationmethodologies, new technologies and relevant early-stagefintechplayers.

Brand

Our family of well-known brands includes Mastercard, Maestro and Cirrus. We manage and promote our brands and brandidentities(includingoursonicbrandidentity)throughadvertising,promotionsandsponsorships,aswellasdigital,mobileandsocialmedia initiatives, in order to increase people’s preference for our brands and usage of our products. We sponsor a variety ofsporting, entertainment and charity-related marketing properties to align with consumer segments important to us and ourcustomers.Ouradvertisingplaysanimportantroleinbuildingbrandvisibility,preferenceandoverallusageamongaccountholdersglobally. Our “Priceless®” advertising campaign, which has run in more than 50 languages and in more than 120 countriesworldwide,promotesMastercardusagebenefitsandacceptance,marketsMastercardpaymentproductsandsolutionsandprovidesMastercardwithaconsistent,recognizablemessagethatsupportsourbrandaroundtheglobe.

HumanCapitalManagementAsofDecember31,2020,weemployedapproximately21,000personsglobally.

WearededicatedtosupportingourworkforceduringtheglobalCOVID-19pandemic:

• WehadnoCOVID-19relatedlayoffsin2020

• WeintroducedaCOVID-19globalemployeebenefitprovidingupto10businessdaysofadditionalpaidleaveforsick,childcareoreldercarerelatedneeds

• Wecovered100%of thecostsassociatedwithCOVID-19testing forallemployeesandprovidedaccess to freeCOVID-relatedtelemedicineconsultationsforourU.S.employees

• We provided employees with flexibility for how and where they get work done and put precautionary health and safetymeasuresinplaceateachofficelocation

Management regularly reviews our people strategy and culture, as well as related risks, with our Human Resources andCompensation Committee, and reviews this annually with our Board of Directors. Our strategy focuses on recruitment,development,successionandretention,including:

• Attractingtoptalentwiththestrengthofourtalentbrand,whichincludesourcultureofbeinga“forceforgood”

• Developingourdepthoftalentthroughacquisitionsandrecruitment

• Strongdevelopmentandsuccessionplanningforkeyroles,includingtalentandleadershipprogramsacrossvariouslevelsthat:

◦ Embedourcultureprinciples◦ Focusondiversepopulationsand◦ Aimtodeveloptalentandpeoplemanagersthroughpersonalizedandgroupexecutivedevelopmentprograms

• Usinglearningtodriveinnovationandgrowth,includingafocusonscalingdigitalfluencyglobally,producttrainingcertification,creatinganenvironmentforemployeestodrivetheirownlearning,andfocusingondevelopingcapabilityinkeyskillareas

• Retainingandgrowinganinclusiveworkforce,including:

◦ Ongoingdevelopmentconversationsandpersonalizeddevelopmentplans◦ Afocusontalentmovement,includingcareermovesandrotationsand◦ Competitiveanddifferentiatedpayandbenefits,includingpayequityonthebasisofgenderand(intheU.S.)raceand

ethnicity,aswellasaflexibleworkmodel

Asanorganization,wearefocusedonmaintainingaworld-classculture,builtonafoundationofdecency:

• Wearemindfulofthehealthofourculture,lookingatretentionofcriticalroles,ourexternalbrandreputation,internallevelsofengagement,anddiverserepresentation

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• Wearecommittedtoprovidingasafeandrespectfulworkplacebuiltonacultureofdecencyandafocusonthewell-beingofouremployees,aswellasmonitoringforpotentialdisruptionstoourcultureandreputation-especiallywithrespecttosucheventsastheCOVID-19pandemic

• Wearefocusedonprovidingandsupportingacultureofvolunteering

• Wehaveestablishedacultureofhighethicalbusinesspracticesandcompliancestandards,groundedinhonesty,decency,trustand personal accountability. It is driven by “tone at the top,” reinforced with regular training, fostered in a speak-upenvironment,andmeasuredbyariskcultureandclimatesurvey

Diversityandinclusionunderpineverythingwedo:

• Welookatourrecruitment,development,successionandretentionpractices(includingglobalattritionrates)withafocusongender,race(intheU.S.)andgenerationalmixofouremployeepopulation

• Wehavedevelopedregionalandfunctionalactionplanstoidentifyprioritiesandactionsthatwillhelpusmakemoreprogressfordiversityandinclusion,includingbalanceandinclusioningenderandracialrepresentation

• Aspartofourcommitmenttoracialjustice,wehavecommittedtoour“InSolidarity”initiative,whichfocusesonpeople,marketandsocietytoharnessourcultureofdecencyandbuildonoureffortstoadvanceinclusionandequality

WeencourageyoutoreviewourSustainabilityReport(locatedonourwebsite)formoredetailedinformationregardingourpeoplestrategy.

RecentDevelopmentsWearefocusedonhelpingindividualsandbusinessesweatherthechallengespresentedbytheCOVID-19pandemicbyensuringournetworkremainssecure,resilientandreliable.Weareapplyingourtechnology,philanthropy,anddataandcybersecurityexpertisetohelprebuildcommunities,ensurethateconomicgrowthisinclusiveandhelpaddressnewchallengesfacinggovernments,smallbusinessesandconsumers.

Consumer

Whiletechnologyhasincreasinglychangedthewaypeoplegetinformation,interact,shopandmakepurchases,consumerscontinuetoexpectaseamlessexperiencewheretheirpaymentissimpleandsecure.Ourteamsarecreatinginnovativesolutionsthatmeettheneedsofconsumersandmerchants inadigitalenvironmentbyapplyingemerging technologies. During theglobalCOVID-19pandemic,wehaveseencontinuedtrendstowardapreferenceforcontactlessandtherapidadoptionofe-commerce.Thesetrendsarefurtheracceleratingthesecularshifttodigitalformsofpayment.In2020,we:

• expanded “click to pay”, the activation of the EMV Secure Remote Commerce industry standard that enables a faster,moresecure checkout experience across web andmobile sites, mobile apps and connected devices. This checkout experience isdesigned toprovide consumers the sameconvenienceand security inadigital environment that theyhavewhenpaying inastore,makeiteasierformerchantstoimplementsecuredigitalpaymentsandprovideissuerswithimprovedfrauddetectionandpreventioncapability.

• continuedourfocusoncontactlesspaymentstechnologytohelpdeliverasimpleandintuitivewaytopay,aswellashealthandsafetybenefitswhenconsumersarelookingfor low-touchoptions. Theseefforts includeraisingcontactlesspurchaselimits invirtuallyallgeographies.

• announcedasuiteof frictionlesssolutions invariousmarketsdesignedtodeliver low-touchhighengagementexperiences forretailers and the consumer. For example, our Shop Anywhere platform enables merchants to create simple, personalizedshoppingexperiencesinstore,offeringconsumersnowait,nocheckoutlinesandasecurewaytopay.

• expandedourDigitalFirstCardProgramtoeachofourregionstoprovideourcustomerswithfoundationalguidelinesthatwillenablethemtooffertheircardholdersafullydigitalpaymentexperiencewithanoptionalphysicalcard.Thissolutionenablesour customers to meet cardholder expectations of immediacy, safety, and convenience, including during card application,authentication and instant card access,making secure purchases (whether contactless in-store, in-app, or via theweb), andmanagingalerts,controls,andbenefits.

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CommercialandB2B

Building on our corporate T&E, fleet, purchasing card and small business capabilities, we have been increasingly focused ondevelopingsolutionstoaddressotherwaysthatbusinessesmovemoney.In2020,we:

• addedaccount-to-accountpaymentfunctionalitytoMastercardTrackBPS,ouropen-loopcommercialserviceplatformbuilttosimplifyandautomatepaymentsbetweensuppliersandbuyers.Withthislaunch,businessesintheUnitedStatescannowhaveasimilarexperiencewithinthisserviceforaccount-to-accountpaymentsastheydoforcardpayments-exchangingdatawithgreaterefficiencyandfacilitatingpaymentsacrossmultiplepaymentrailsincludingreal-timeandbatchACHpayments.

• launched Digital Doors, a dedicated program to help small businesses successfully adapt to the changing needs of theircustomersbyestablishingandprotectinganonlinepresence,includingacceptingdigitalpayments.WehavealsocreatedafreeSmallBusinessDigitalReadinessDiagnostictoidentifythefirststepsneededinthistransition.

NewPaymentProductsandOpenBanking

In order to help grow our business and offer more electronic payment options to consumers, businesses and governments,Mastercardhasdevelopedandenhancedsolutionsbeyondtheprincipalswitchingcapabilitiesavailableonourcorenetwork. Webelievethiswillallowustocapturemorepaymentflows,includingB2B,P2P,B2Candgovernmentdisbursements.In2020,we:

• continuedtoexpandoursupportofreal-timepaymentsglobally,includingbeingselectedtobuildandoperateanewreal-timeclearingandsettlementplatforminCanadaandpartneringwiththeSaudiArabianMonetaryAuthoritytoenableinstantaccount-to-accountpaymentsinthecountryforthefirsttime.Thesedevelopmentsbuildonotherrecentachievements, includingourselectiontoenhancetheInstaPayreal-timeretailpaymentsysteminthePhilippines(includingoperatingtheinfrastructureforandprovidinganti-moneylaunderingtoolstotheitsnationalclearingswitch).AsofDecember31,2020,weeitheroperatedorwereimplementingreal-timepaymentsinfrastructurein12ofthetop50marketsasmeasuredbyGDP.

• positioned ourselves to add to our real-time payments solutions, including our pending acquisition of the majority of theCorporateServicesbusinessofNetsDenmarkA/S.Thependingacquisitionprimarilycomprisestheclearingandinstantpaymentservices,ande-billingsolutionsofthebusiness.

• strengthenedMastercard’sopen-bankingplatformwithouracquisitionof Finicity, a leadingNorthAmericanproviderof real-timeaccess to financialdataand insights. Theacquisitionenablesagreaterchoiceof financial services, reinforcingour long-standingpartnershipswithandcommitmenttofinancialinstitutionsandfintechsacrosstheglobe.ThisacquisitionalsoenablesustoexpandourcapabilitiesacrossNorthAmericaandglobally,andinparticularacceleratetheadoptionofFinicity’sservicesinNorthAmerica. TogetherwithFinicity,wewillbeabletofocusonservingtheneedsofthelendingmarket, includingthroughhelping to streamline loan application processes and improve credit decisioning, thereby helping to drive further financialinclusion.

• further extendedMastercardCross-Border Services to customers, including financial institutions and fintechs, in every regionacross the globe. These services enable a wide range of payment flows and use cases, including trade, remittances anddisbursements.Theseflowsareenabledviaadistributionnetworkthatcontinuestoevolveacrossmultiplechannels,includingaccount,card,andwallets.Inparticular,theseserviceshaveenabledinboundB2BpaymentsintoChina.

• extendedourblockchaininitiatives,providingadditionaltransparencyandefficienciestothecross-borderB2Bpaymentsspaceandproofofprovenance-innovative,securesolutionsacrosstheglobalsupplychain.

Value-AddedProductsandServicesWe provide products and services including cyber and intelligence, loyalty, processing, data analytics and consulting that meetevolvingrequirementsandtheexpectationsofourstakeholders.Werecently:

• extendedourinvestmentsinArtificialIntelligence(“AI”)by:

◦ launchingMastercard ThreatScan, anAI-powered solution that helps banksproactively identify potential vulnerabilities intheirauthorizationsystems.Theserviceworksalongsideanissuer’sexistingfraudtools,imitatingknowncriminaltransactionbehaviortoidentifypotentialweaknessesandpromptactionbeforefraudpotentiallyoccurs.

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◦ scalingDecision Intelligence™, our fraud scoring technology, to score billions of transactions in real time every daywhileincreasingapprovalsandreducingfalsedeclines.

• scaled digital services in our Loyalty and Engagement capabilities to support customers in their response to the accelerateddemand of digital services from consumers during the pandemic. This scaling includes additional capabilities for real-timepromotionsandcashbackoffers,digitalacquisition,digital trainingandonlineofferstobringa fullsuiteofdigital loyaltyandmarketingsolutionstomerchantsandfinancialinstitutions.

• enhanced the serviceswe are able to offer to customers based on account-to-account flows, including data insightswe areprovidingU.K. andU.S. customers tohelp themwith anti-money laundering compliance and identification andpreventionofotherfinancialcrimes.

• launchedRecoveryInsights,asetofdata,techandresearchtoolsthatcanhelpairlines,restaurants,consumerpackagedgoodscompanies,banks,governmentsandothersnavigatetheriseine-commerce,fine-tuneoperations,andprioritizeinvestments.

KeyInitiatives• InlightofthedigitalinequalitygapsbeingexacerbatedbyCOVID-19,wehaveexpandedourworldwidecommitmenttofinancial

inclusion,pledgingtobringatotalof1billionpeopleand50millionmicroandsmallbusinessesintothedigitaleconomyby2025.Aspartofthiseffort,wearefocusedonproviding25millionwomenentrepreneurswithsolutionsthatcanhelpthemgrowtheirbusinesses.

• Engaged with several hundred national and local governments around the world to support their efforts to respond to thepandemiccrisis, including facilitatingelectronicdisbursementsofvitalbenefitsandprovidingaccess todata-driven insights inordertoassesstheimpactofCOVID-19ontheircommunitiesandoptimizetheirrecoveryplans.

• Wehave committed $250million in financial, technology, product and insight assets over the next five years to support thefinancial security and vitality of small businesses and their workers, including supporting the transition of low-incomeentrepreneurstodigitalbankingandhelpingsmallbusinessesaccessfederalrelief.

• Webegan to implementour “In Solidarity” initiative,which focusesonpeople,market and society to harness our cultureofdecencyandbuildonoureffortstoadvanceinclusionandequality.

• WelaunchedthePricelessPlanetCoalition,aplatformtounitecorporatesustainabilityeffortsandmakemeaningfulinvestmentstopreserve theenvironment. Togetherwithpartnerswhoshareacommitment todoingwellbydoinggood, thecoalition ispledgingtoplant100milliontreesoverfiveyears.

• WeannouncedtheexpansionofStartPath,ourstartupengagementprogram,addingnewseedbusinessesandmoretechnologypartners.Throughthisprogram,weprovideentrepreneursaccesstoexpertengineersandspecialiststhatcanhelpthemdeploynewservicesquicklyandefficientlyandhelpthemgrowtheirbusinessesandscalesustainably.

RevenueSourcesWegeneraterevenueprimarilyfromassessingourcustomersbasedonGDVontheproductsthatcarryourbrands,fromthefeeswecharge to our customers for providing transaction processing and from other payment-related products and services. Our netrevenuesareclassifiedintofivecategories:domesticassessments,cross-bordervolumefees,transactionprocessing,otherrevenuesandrebatesandincentives(contra-revenue).

See“Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperations-Revenue”inPartII,Item7andNote3,Revenueformoredetailaboutourrevenue,GDV,processedtransactionsandourotherpayment-relatedproductsandservices.

IntellectualPropertyWeownanumberofvaluabletrademarksthatareessentialtoourbusiness,includingMastercard,MaestroandCirrus,throughoneor more affiliates. We also own numerous other trademarks covering various brands, programs and services offered by us tosupportourpaymentprograms.Trademarkandservicemarkregistrationsaregenerallyvalidindefinitelyaslongastheyareusedand/orproperlymaintained.Throughlicenseagreementswithourcustomers,weauthorizetheuseofourtrademarksonaroyalty-freebasisinconnectionwithourcustomers’issuingandmerchantacquiringbusinesses.Inaddition,weownanumberofpatentsand patent applications relating to payment solutions, transaction processing, smart cards, contactless, mobile, biometrics, AI,security systems, blockchain and other technologies, which are important to our business operations. These patents expire atvaryingtimesdependingonthejurisdictionandfilingdate.

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CompetitionWefacecompetitioninallcategoriesofpayment,including:

• cashandchecks

• card-basedpayments,includingcredit,charge,debit,ATMandprepaidproducts,aswellaslimited-useproductssuchasprivatelabel

• contactless,mobileande-commercepayments,aswellascryptocurrency

• otherelectronicpayments,includingACHpaymentsandwiretransfers

Wefaceanumberofcompetitorsbothwithinandoutsideoftheglobalpaymentsindustry:

• Cash,CheckandLegacyACH.Cashandcheckscontinuetorepresentoneofthemostwidelyusedformsofpayment.However,anevenlargershareofpaymentsonaU.S.dollarvolumebasisaremadevialegacy,or“slow,”ACHplatforms.

• General Purpose PaymentNetworks. We competeworldwidewith payment networks such as Visa, American Express, JCB,ChinaUnionPayandDiscover,amongothers. Somecompetitorshavemoremarket share thanwedo incertain jurisdictions.Some also have different business models that may provide an advantage in pricing, regulatory compliance burdens orotherwise.Globally,financialinstitutionsmayissuebothMastercardandVisa-brandedpaymentproducts,andwecompetewithVisa for business on the basis of individual portfolios or programs. In addition, a number of our customers issue AmericanExpressand/orDiscover-brandedpaymentcardsinamannerconsistentwithafour-partysystem.Wecontinuetofaceintensecompetitivepressureon thepriceswechargeour issuersandacquirers,andweseek toenter intobusinessagreementswiththemthroughwhichweofferincentivesandothersupporttoissueandpromoteourpaymentproducts.

• DebitandLocalNetworks.WecompetewithATMandpoint-of-saledebitnetworksinvariouscountries.Inaddition,inmanycountriesoutsideoftheUnitedStates,localdebitbrandsserveasthemaindomesticbrands,whileourbrandsareusedmostlytoenablecross-bordertransactions(typicallyrepresentingasmallportionofoveralltransactionvolume).Certainjurisdictionshavealsocreateddomesticcardschemesfocusedmostlyondebit. Inaddition,severalgovernmentsarepromoting,orconsideringpromoting,localnetworksfordomesticswitching.See“RiskFactors”inPartI,Item1Aforamoredetaileddiscussionoftherisksrelatedtopaymentssystemregulationandgovernmentactionsthatmaypreventusfromcompetingeffectively.

• Real-timeAccount-basedPaymentSystems. Wefacecompetition in the real-timeaccount-basedpayment space fromothercompaniesthatprovideinfrastructure,applicationsandservicestosupportthesepaymentsolutions.

• AlternativePaymentsSystemsandNewEntrants.Astheglobalpaymentsindustrybecomesmorecomplex,wefaceincreasingcompetition from alternative payment systems and emerging payment providers. Many of these providers, who in manycircumstances can also be our partners or customers, have developed payments systems focused on online activity in e-commerceandmobilechannels(insomecases,expandingtootherchannels),andmayprocesspaymentsusingin-houseaccounttransfers,real-timeaccount-basedpaymentnetworksorglobalorlocalnetworks.Examplesincludedigitalwalletproviders(suchasPaytm,PayPal,AlipayandAmazon),POS financing/buynowpay laterproviders (suchasKlarna),mobileoperator services,mobilephone-basedmoneytransferandmicrofinancingservices(suchasmPesa),handsetmanufacturersandcryptocurrencies.Wealsocompetewithmerchantsandgovernments.

• Value-Added Products and Service Providers. We face competition from companies that provide alternatives to our value-addedproductsandservices,includinginformationservicesandconsultingfirmsthatprovideconsultingservicesandinsightstofinancialinstitutions,merchantsandgovernmentsandtechnologycompaniesthatprovidecyberandfraudsolutions,aswellascompaniesthatcompeteagainstusasprovidersofloyaltyandprogrammanagementsolutions.Regulatoryinitiativescouldalsoleadtoincreasedcompetitioninthisspace.

Mastercardisatrustedintermediaryinacomplexsystem.Ourcompetitiveadvantagesincludeour:

• globallyrecognizedbrands

• highly adaptable global acceptance network built over more than 50 years which can reach a variety of parties enablingpayments

• globalpaymentsnetworkwithworld-classoperatingperformance

• expertiseinreal-timeaccount-basedpaymentsandopenbanking

• developmentandadoptionofinnovativeproductsanddigitalsolutions

• safetyandsecuritysolutionsembeddedinournetworks

• analyticsinsightsandconsultingservicesthathelpissuersandmerchantsoptimizetheirpaymentsandrelatedbusinesses

• loyaltysolutionsthatenhancethepaymentsvaluepropositionforissuersandmerchants

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• abilitytoserveabroadarrayofparticipantsinglobalpaymentsduetoourexpandedon-soilpresenceinindividualmarketsandaheightenedfocusonworkingwithgovernments

• worldclasstalentandculture,withafocusoninclusionandbeinga“forceforgood”

GovernmentRegulationGeneral. Government regulation impacts key aspects of our business. We are subject to regulations that affect the paymentsindustry in themany countries in which our integrated products and services are used. We are committed to comply with allapplicablelawsandregulationsandimplementpolicies,proceduresandprogramsdesignedtopromotecompliance.Wecoordinategloballywhileactinglocallyandleverageourrelationshipstomanagetheeffectsofregulationonus. See“RiskFactors” inPartI,Item1Aformoredetailandexamplesoftheregulationtowhichwearesubject.

PaymentsOversightandRegulation.Centralbanksandotherregulatorsinseveraljurisdictionsaroundtheworldeitherhave,orareseekingtoestablish,formaloversightoverthepayments industry,aswellasauthoritytoregulatecertainaspectsofthepaymentsystems in their countries. Such authority has resulted in regulationof various aspects of our business. In the EuropeanUnion,Mastercardissubjecttosystemicimportanceregulation,whichincludesvariousrequirementswemustmeet,includingobligationsrelated togovernanceand riskmanagement. In theU.K., theBankofEnglanddesignatedVocalink,our real-timeaccount-basedpayment network platform, to be a “specified service provider”,which includes supervisions and examination requirements. Inaddition,EuropeanUnionlegislationrequiresustoseparateourschemeactivities(brand,products,franchiseandlicensing)fromourswitchingactivitiesandotherprocessingintermsofhowwegotomarket,makedecisionsandorganizeourstructure.

InterchangeFees.Interchangefeesthatsupportthefunctionandvalueoffour-partypaymentssystemslikeoursarebeingreviewedorchallenged invarious jurisdictionsaroundtheworldvia legislationtoregulate interchangefees,competition-relatedregulatoryproceedings,centralbankregulationand litigation. Examples includestatutes intheUnitedStatesthatcapdebit interchangeforcertain regulated activities, our settlement with the European Commission resolving its investigation into our interregionalinterchangefeesandtheEuropeanUnionlegislationcappingconsumercreditanddebit interchangefeesonpaymentsissuedandacquiredwithintheEuropeanEconomicArea(the“EEA”).Formoredetail,see“RiskFactors-OtherRegulation”inPartI,Item1AandNote21(LegalandRegulatoryProceedings)totheconsolidatedfinancialstatementsincludedinPartII,Item8.

PreferentialorProtectiveGovernmentActions.Somegovernmentshavetakenactiontoprovideresources,preferentialtreatmentorotherprotectiontoselecteddomesticpaymentsandprocessingproviders,aswellastocreatetheirownnationalproviders.Forexample, governments in some countries mandate switching of domestic payments either entirely in that country or by onlydomesticcompanies.InChina,wearecurrentlyexcludedfromdomesticswitchingandareseekingmarketaccess,whichisuncertainand subject to a number of factors, including receiving regulatory approval. We are in active discussions to explore differentsolutions.

Anti-MoneyLaundering,CounterFinancingofTerrorism,EconomicSanctionsandAnti-Corruption.Wearesubjecttoanti-moneylaundering(“AML”)andcounter-financingofterrorism(“CFT”)lawsandregulationsglobally,includingtheU.S.BankSecrecyActandtheUSAPATRIOTAct,aswellasthevariouseconomicsanctionsprograms, includingthose imposedandadministeredbytheU.S.Office of Foreign Assets Control (“OFAC”). 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 paymentnetwork from being used to facilitate money laundering and other illicit activity and to address these legal and regulatoryrequirementsandassistinmanagingmoneylaunderingandterroristfinancingrisks.TheeconomicsanctionsprogramsadministeredbyOFAC restrict financial transactionsandotherdealingswith certain countriesandgeographies (specificallyCrimea,Cuba, Iran,North Korea and Syria) and with persons and entities included in OFAC sanctions lists including its list of Specially DesignatedNationalsandBlockedPersons(the“SDNList”).WetakemeasurestopreventtransactionsthatdonotcomplywithOFACandotherapplicablesanctions,includingestablishingarisk-basedcomplianceprogramthathaspolicies,proceduresandcontrolsdesignedtopreventusfromhavingunlawfulbusinessdealingswithprohibitedcountries,regions,individualsorentities.Aspartofthisprogram,we obligate issuers and acquirers to comply with their local sanctions obligations and the U.S. sanctions programs, includingrequiringthescreeningofaccountholdersandmerchants,respectively,againstOFACsanctions lists(includingtheSDNList). IranandSyriahavebeenidentifiedbytheU.S.StateDepartmentasterrorist-sponsoringstates,andwehavenooffices,subsidiariesoraffiliatedentitieslocatedinthesecountriesanddonotlicenseentitiesdomiciledthere.Wearealsosubjecttoanti-corruptionlawsand regulations globally, including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act, which, among other things,generallyprohibitgivingorofferingpaymentsoranythingofvalueforthepurposeofimproperlyinfluencingabusinessdecisionorto gain an unfair business advantage. We have implemented policies, procedures and internal controls to proactively managecorruptionrisk.

FinancialSectorOversight.Weareormaybesubjecttoregulationsrelatedtoourroleinthefinancialindustryandourrelationshipwithourfinancialinstitutioncustomers.Inaddition,weareormaybesubjecttoregulationbyanumberofagencieschargedwith

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oversight of, among other things, consumer protection, financial and banking matters. The regulators have supervisory andindependentexaminationauthorityaswellasenforcementauthoritythatwemaybesubjecttobecauseoftheservicesweprovidetofinancialinstitutionsthatissueandacquireourproducts.

Issuer Practice Legislation andRegulation. Our customers are subject to numerous regulations and investigations applicable tobanks, financial institutions and others in their capacity as issuers and otherwise, impacting us as a consequence. Additionally,regulationssuchastherevisedPaymentServicesDirective(commonlyreferredtoas“PSD2”)intheEEArequirefinancialinstitutionstoprovidethird-partypayment-processorsaccesstoconsumerpaymentaccounts,enablingthemtoroutetransactionsawayfromMastercardproductsandprovidepaymentinitiationandaccountinformationservicesdirectlytoconsumerswhouseourproducts.PSD2also requiresanewstandard forauthenticationof transactions,whichnecessitatesadditionalverification information fromconsumerstocompletetransactions. Thismay increasethenumberof transactionsthatconsumersabandon ifweareunabletoensureafrictionlessauthenticationexperienceunderthenewstandards.

RegulationofInternetandDigitalTransactions.Variousjurisdictionshaveenactedorhaveproposedregulationrelatedtointernettransactions. The legislation applies to payments systemparticipants, including us and ourU.S. customers, and is implementedthroughafederalregulation. Wemayalsobe impactedbyevolving lawssurroundinggambling, includingfantasysports. Certainjurisdictions are also considering regulatory initiatives in digital-related areas that could impact us, such as cyber-security andcopyrightandtrademarkinfringement.

Privacy,DataandInformationSecurity.AspectsofouroperationsorbusinessaresubjecttoincreasinglycomplexprivacyanddataprotectionlawsintheUnitedStates,theEuropeanUnionandelsewherearoundtheworld.Forexample,intheUnitedStates,weand our customers are respectively subject to Federal Trade Commission and federal banking agency information safeguardingrequirements under theGramm-Leach-Bliley Act that require themaintenance of awritten, comprehensive information securityprogram. In the European Union, we are subject to the General Data Protection Regulation (the “GDPR”), which requires acomprehensive privacy and data protection program to protect the personal and sensitive data of EEA residents. A number ofregulators and policymakers around the globe are using the GDPR as a reference to adopt new or updated privacy and dataprotection laws, including intheU.S. (California),Argentina,Brazil,Canada,Chile, India, IndonesiaandKenya. Somejurisdictions,suchasIndia,arecurrentlyconsideringadoptingorhaveadopted“datalocalization”requirements,whichmandatethecollection,processing,and/orstorageofdatawithintheirborders.Webelievethatvariousformsofdatalocalizationrequirementsareunderconsiderationinothercountriesandjurisdictions, includingtheEuropeanUnion.Duetoincreasingdatacollectionanddataflows,numerousdatabreachesandsecurityincidentsaswellastheuseofemergingtechnologiessuchasartificialintelligence,regulationsinthisareaareconstantlyevolvingwithregulatoryandlegislativeauthoritiesinnumerouspartsoftheworldadoptingproposalstoregulatedataandprotectinformation.Inaddition,theinterpretationandapplicationoftheseprivacyanddataprotectionlawsareoftenuncertainandinastateofflux,thusrequiringconstantmonitoringforcompliance.

Additional RegulatoryDevelopments. Various regulatory agencies also continue to examine awide variety of issues that couldimpact us, including evolving laws surrounding marijuana, prepaid payroll cards, virtual currencies, identity theft, accountmanagementguidelines,disclosurerules,securityandmarketingthatwouldimpactourcustomersdirectly.

AdditionalInformationMastercardIncorporatedwas incorporatedasaDelawarecorporation inMay2001. Weconductourbusinessprincipallythroughourprincipaloperatingsubsidiary,MastercardInternationalIncorporated,aDelawarenon-stock(ormembership)corporationthatwasformedinNovember1966.Formoreinformationaboutourcapitalstructure,includingourClassAcommonstock(ourvotingstock)andClassBcommonstock(ournon-votingstock),seeNote16(Stockholders'Equity)totheconsolidatedfinancialstatementsincludedinPartII,Item8.

WebsiteandSECReportsOurinternetaddressiswww.mastercard.com.Fromtimetotime,wemayuseourcorporatewebsiteasachannelofdistributionofmaterialcompanyinformation.Financialandothermaterialinformationisroutinelypostedandaccessibleontheinvestorrelationssectionofourcorporatewebsite.Youcanalsovisit“InvestorAlerts”intheinvestorrelationssectiontoenrollyouremailaddresstoautomaticallyreceiveemailalertsandotherinformationaboutMastercard.

OurannualreportonForm10-K,quarterlyreportsonForm10-Q,currentreportsonForm8-Kandamendmentstothosereportsareavailable forreview,withoutcharge,onthe investorrelationssectionofourcorporatewebsiteassoonasreasonablypracticableaftertheyarefiledwith,orfurnishedto,theU.S.SecuritiesandExchangeCommission(the“SEC”). TheinformationcontainedonourcorporatewebsiteisnotincorporatedbyreferenceintothisReport.OurfilingsarealsoavailableelectronicallyfromtheSECatwww.sec.gov.

PARTIITEM1.BUSINESS


Item1A.Riskfactors

RISKHIGHLIGHTS

LegalandRegulatory BusinessandOperations

PaymentsIndustryRegulation COVID-19 GlobalEconomicandPoliticalEnvironment

PreferentialorProtectiveGovernmentActions CompetitionandTechnology BrandandReputationalImpact

Privacy,DataandSecurity InformationSecurityandServiceDisruptions TalentandCulture

OtherRegulation StakeholderRelationships Acquisitions

Litigation SettlementandThird-PartyObligations

ClassACommonStockandGovernanceStructure

LegalandRegulatory

PaymentsIndustryRegulation

Global regulatoryand legislativeactivitydirectly relatedtothepayments industrymayhaveamaterialadverse impactonouroverallbusinessandresultsofoperations.

Regulatorsincreasinglyseektoregulatecertainaspectsofpaymentssystemssuchasours,orestablishorexpandtheirauthoritytodoso.Manyjurisdictionshaveenactedsuchregulations,establishing,andpotentiallyfurtherexpanding,obligationsorrestrictionswithrespecttothetypesofproductsandservicesthatwemayoffer,thecountriesinwhichourintegratedproductsandservicesmaybeused,thewaywestructureandoperateourbusinessandthetypesofconsumersandmerchantswhocanobtainoracceptourproductsor services. Newregulationsandoversightcouldalso relate toourclearingandsettlementactivities (including riskmanagementpoliciesandprocedures,collateralrequirements,participantdefaultpoliciesandprocedures,theabilitytocompletetimelyswitchingoffinancialtransactions,andcapitalandfinancialresourcerequirements).Severaljurisdictionshavealsoinquiredaboutthenetworkfeeswechargetoourcustomers(typicallyaspartofbroadermarketreviewsofretailpayments). Inaddition,severalcentralbanksorsimilarregulatorybodiesaroundtheworldhaveincreased,orareseekingtoincrease,theirformaloversightoftheelectronicpaymentsindustry.Insomecases,wehavebeendesignatedasa“systemicallyimportantpaymentsystem”,andotherregulatorsmayconsiderdesignatingusassystemically importantor inasimilarcategoryresulting inheightenedregulatoryoversight. These obligations, designations and restrictions may further expand and could conflict with each other as morejurisdictionsimposeoversightofpaymentsystems.Moreover,asregulatorsaroundtheworldincreasinglylooktoreplicatesimilarregulation 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 (forexample,debitregulationscouldleadtoregulationofcreditproducts).Asaresult,theriskstoourbusinesscreatedbyanyonenewlaworregulationaremagnifiedbythepotential ithastobereplicated inother jurisdictionsor involveotherproductswithinanyparticularjurisdiction.

Increasedregulationandoversightofpaymentsystemsmayresultincostlycomplianceburdensorotherwiseincreaseourcosts.Asaresult,issuersandacquirerscouldbelesswillingtoparticipateinourpaymentssystem,reducethebenefitsofferedinconnectionwiththeuseofourproducts(makingourproducts lessdesirabletoconsumers),reducethevolumeofdomesticandcross-bordertransactions or other operational metrics, disintermediate us, impact our profitability and limit our ability to innovate or offerdifferentiatedproductsandservices,allofwhichcouldmateriallyandadverselyimpactourfinancialperformance.Inaddition,anyregulationthatisenactedrelatedtothetypeandlevelofnetworkfeeswechargeourcustomerscouldalsomateriallyandadversely

PARTIITEM1A.RISKFACTORS


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 customizationwith regard to such changes,which could negatively impact us. Suchchangescould lead tonewordifferentcriteria forparticipation inandaccess toourpaymentssystemby financial institutionsorothercustomers.Moreover,failuretocomplywiththelawsandregulationstowhichwearesubjectcouldresultinfines,sanctions,civildamagesorotherpenalties,whichcouldmateriallyandadverselyaffectouroverallbusinessandresultsofoperations,aswellashaveanimpactonourbrandandreputation.

Increased regulatory, legislative and litigation activitywith respect to interchange rates could have an adverse impact on ourbusiness.

Interchangeratesareasignificantcomponentofthecoststhatmerchantspayinconnectionwiththeacceptanceofourproducts.Although we do not earn revenues from interchange, interchange rates can impact the volume of transactions we see on ourpaymentproducts.Ifinterchangeratesaretoohigh,merchantsmaystopacceptingourproductsorroutetransactionsawayfromournetwork.Ifinterchangeratesaretoolow,issuersmaystoppromotingourintegratedproductsandservices,eliminateorreduceloyaltyrewardsprogramsorotheraccountholderbenefits(e.g.,freecheckingorlowinterestratesonbalances),orchargefeestoaccountholders(e.g.,annualfeesorlatepaymentfees).

Governmentsandmerchantgroupsinanumberofcountrieshaveimplementedorareseekinginterchangeratereductionsthroughlegislation,competition law,centralbankregulationand litigation. See“Business -GovernmentRegulation” inPart I, Item1andNote21(LegalandRegulatoryProceedings)totheconsolidatedfinancialstatementsincludedinPartII,Item8formoredetails.

If issuers cannotcollectorweare forced to reduce interchange rates, issuersmaybe lesswilling toparticipate inour four-partypaymentssystem,ormayreducethebenefitsofferedinconnectionwiththeuseofourproducts,reducingtheattractivenessofourproducts to consumers. In particular, changes to interregional interchange fees as a result of the resolution of the EuropeanCommission’s investigation could impact our cross-border transaction activity disproportionately versus competitors that are notsubject to similar reductions. These and other impacts could lower transaction volumes, and/or make proprietary three-partynetworksorotherformsofpaymentmoreattractive.Issuerscouldreducethebenefitsassociatedwithourproductsorchoosetochargehigherfeestoconsumerstoattempttorecoupaportionofthecostsincurredfortheirservices. Inaddition,issuerscouldseekafeereductionfromustodecreasetheexpenseoftheirpaymentprograms,particularlyifregulationhasadisproportionateimpactonusascomparedtoourcompetitorsintermsofthefeeswecancharge.Thiscouldmakeourproductslessdesirabletoconsumers,reducethevolumeoftransactionsandourprofitability,andlimitourabilitytoinnovateorofferdifferentiatedproducts.

Wearedevotingsubstantialresourcestodefendingourrighttoestablishinterchangeratesinregulatoryproceedings,litigationandlegislativeactivity.Thepotentialoutcomeofanyoftheseactivitiescouldhaveamorepositiveornegativeimpactonusrelativetoourcompetitors.Ifweareultimatelyunsuccessfulindefendingourabilitytoestablishinterchangerates,anyresultinglegislation,regulation and/or litigationmay have amaterial 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 civildamages,theamountofwhichcouldbematerial.

Limitationsonourabilitytorestrictmerchantsurchargingcouldmateriallyandadverselyimpactourresultsofoperations.

Wehavehistoricallyimplementedpolicies,referredtoasno-surchargerules,incertainjurisdictions,includingtheUnitedStates,thatprohibitmerchants fromcharginghigherpricestoconsumerswhopayusingourproducts insteadofothermeans. Authorities inseveral jurisdictions have acted to end or limit the application of these no-surcharge rules (or indicated interest in doing so).Additionally, we have modified our no-surcharge rules to permit U.S. merchants to surcharge credit cards, subject to certainlimitations.Itispossiblethatovertimemerchantsinsomeorallmerchantcategoriesinthesejurisdictionsmaychoosetosurchargeaspermittedbytherulechange.Thiscouldresultinconsumersviewingourproductslessfavorablyand/orusingalternativemeansofpayment insteadofelectronicproducts,whichcouldresult inadecrease inouroverall transactionvolumes,andwhich inturncouldmateriallyandadverselyimpactourresultsofoperations.

PreferentialorProtectiveGovernmentActions

Preferential and protective government actions related to domestic payment services could adversely affect our ability tomaintainorincreaseourrevenues.

Governments in some countries have acted, or in the future may act, to provide resources, preferential treatment or otherprotectiontoselectednationalpaymentandswitchingproviders,orhavecreated,ormayinthefuturecreate,theirownnationalprovider.Thisactionmaydisplaceusfrom,preventusfromenteringinto,orsubstantiallyrestrictusfromparticipatingin,particulargeographies,andmaypreventusfromcompetingeffectivelyagainstthoseproviders.Forexample:

• Governments in some countries have implemented, or may implement, regulatory requirements that mandate switching ofdomesticpaymentseitherentirelyinthatcountryorbyonlydomesticcompanies.



• Somejurisdictionsareconsideringrequirementstocollect,processand/orstoredatawithintheirborders,aswellasprohibitionsonthetransferofdataabroad,leadingtotechnologicalandoperationalimplications.

• Geopolitical events and resulting OFAC sanctions, adverse trade policies or other types of government actions could leadjurisdictionsaffectedbythosesanctionstotakeactionsinresponsethatcouldadverselyaffectourbusiness.

• Regionalgroupsofcountriesareconsidering,ormayconsider,efforts torestrictourparticipation in theswitchingof regionaltransactions.

Suchdevelopmentspreventusfromutilizingourglobalswitchingcapabilitiesfordomesticorregionalcustomers. Our inabilitytoeffectchangein,orworkwith,thesejurisdictionscouldadverselyaffectourabilitytomaintainorincreaseourrevenuesandextendourglobalbrand.

Additionally,somejurisdictionshaveimplemented,ormayimplement,foreignownershiprestrictions,whichcouldpotentiallyhavetheeffectofforcingorinducingthetransferofourtechnologyandproprietaryinformationasaconditionofaccesstotheirmarkets.Suchrestrictionscouldadverselyimpactourabilitytocompeteinthesemarkets.

Privacy,DataandSecurity

Regulationofprivacy,data,securityandthedigitaleconomycouldincreaseourcosts,aswellasnegativelyimpactourgrowth.

Wearesubjecttoincreasinglycomplexregulationsrelatedtoprivacy,dataandinformationsecurityinthejurisdictionsinwhichwedo business. These regulations could result in negative impacts to our business. As we continue to develop integrated andpersonalized products and services tomeet the needs of a changingmarketplace, as well as acquire new companies, we haveexpandedour informationprofile through thecollectionofadditionaldata fromadditional sourcesandacrossmultiplechannels.This expansion has amplified the impact of these regulations on our business. Regulation of privacy and data and informationsecurityoften times requiremonitoringofandchanges toourdatapractices in regard to thecollection,use,disclosure, storage,transferand/orsecurityofpersonalandsensitiveinformation,aswellasincreasedcareinourdatamanagement,governanceandqualitypractices. Whilewemakeeveryefforttocomplywithall regulatoryrequirementsandwedeployaprivacy-by-designanddata-by-designapproachtoallofourproductdevelopment,thespeedandpaceofchangemaynotallowustomeetrapidlyevolvingexpectations.WearealsosubjecttoenhancedcomplianceandoperationalrequirementsintheEuropeanUnion,andpolicymakersaroundtheglobeareusingtheserequirementsasareferencetoadoptneworupdatedprivacylawsthatcouldresultinsimilarorstricter requirements inother jurisdictions. Some jurisdictionsarealsoconsidering requirements tocollect,processand/or storedata within their borders, as well as prohibitions on the transfer of data abroad, leading to technological and operationalimplications. Other jurisdictions are considering adopting sector-specific regulations for the payments industry, including forceddata sharing requirements or additional verification requirements that overlap or conflictwith, or diverge from, general privacyrules. Failure to complywith these laws, regulations and requirements could result in fines, sanctionsorotherpenalties,whichcouldmateriallyandadverselyaffectourresultsofoperationsandoverallbusiness,aswellashaveanimpactonourreputation.

Newrequirementsorinterpretationsofexistingrequirementsintheseareas,orthedevelopmentofnewregulatoryschemesrelatedtothedigitaleconomyingeneral,mayalsoincreaseourcostsand/orrestrictourabilitytoleveragedataforinnovation.Thiscouldimpacttheproductsandservicesweofferandotheraspectsofourbusiness,suchasfraudmonitoring,theneedforimproveddatamanagement, governance and quality practices, the development of information-based products and solutions, and technologyoperations. Inaddition,theserequirementsmay increasethecoststoourcustomersof issuingpaymentproducts,whichmay, inturn,decreasethenumberofourpaymentproductsthattheyissue.Moreover,duetoaccountdatacompromiseeventsandprivacyabusesbyothercompanies,aswellasthedisclosureofmonitoringactivitiesbycertaingovernmentalagenciesincombinationwiththe use of artificial intelligence and new technologies, there has been heightened legislative and regulatory scrutiny around theworld that could lead to further regulation and requirements and/or futureenforcement. Thosedevelopmentshave also raisedpublicattentiononcompanies’datapracticesandhavechangedconsumerandsocietalexpectationsforenhancedprivacyanddataprotection.Anyofthesedevelopmentscouldmateriallyandadverselyaffectouroverallbusinessandresultsofoperations.

In addition, fraudulent activity and increasing cyberattacks have encouraged legislative and regulatory intervention,which coulddamageourreputationandreducetheuseandacceptanceofourintegratedproductsandservicesorincreaseourcompliancecosts.Criminalsareusingincreasinglysophisticatedmethodstocaptureconsumerpersonalinformationtoengageinillegalactivitiessuchascounterfeitingorotherfraud.Asoutsourcingandspecializationbecomecommoninthepaymentsindustry,therearemorethirdparties involved inprocessing transactionsusingourpaymentproducts. Whileweare takingmeasures tomakecardanddigitalpaymentsmoresecure,increasedfraudlevelsinvolvingourintegratedproductsandservices,ormisconductornegligencebythirdparties switchingorotherwise servicingour integratedproductsandservices, could lead to legislativeor regulatory intervention,suchasenhancedsecurityrequirementsandliabilities,aswellasdamagetoourreputation.



OtherRegulation

Regulationsthatdirectlyor indirectlyapplytoMastercardasaresultofourparticipation intheglobalpayments industrymaymateriallyandadverselyaffectouroverallbusinessandresultsofoperations.

We are subject to regulations that affect the payments industry in themany jurisdictions inwhich our integrated products andservicesareused.Manyofourcustomersarealsosubjecttoregulationsapplicabletobanksandotherfinancialinstitutionsthat,attimes,consequentlyaffectus. Regulationofthepaymentsindustry, includingregulationsapplicabletousandourcustomers,hasincreasedsignificantlyinthelastseveralyears.See“Business-GovernmentRegulation”inPartI,Item1foradetaileddescriptionofsuchregulationandrelatedlegislation.Examplesinclude:

• Anti-MoneyLaundering,CounterFinancingofTerrorism,EconomicSanctionsandAnti-Corruption-WearesubjecttoAMLandCFTlawsandregulationsglobally.EconomicsanctionsprogramsadministeredbyOFACrestrictfinancialtransactionsandotherdealingswith certain countries and geographies, and persons and entities. We are also subject to anti-corruption laws andregulations globally, which, among other things, generally prohibit giving or offering payments or anything of value for thepurposeofimproperlyinfluencingabusinessdecisionortogainanunfairbusinessadvantage.

• Account-basedPaymentSystems-IntheU.K.,aspectsofourVocalinkbusinessaresubjecttotheU.K.paymentsystemoversightregimeandaredirectlyoverseenbytheBankofEngland.

• IssuerPractice LegislationandRegulation - Certain regulations (suchasPSD2 in theEEA)may impact variousaspectsofourbusiness. Forexample, PSD2’s strongauthentication requirement could increase thenumberof transactions that consumersabandonifweareunabletosecureafrictionlessauthenticationexperienceunderthenewstandards.Anincreaseintherateofabandonedtransactionscouldadverselyimpactourvolumesorotheroperationalmetrics.

Increasedregulatoryfocusonus,suchasinconnectionwiththemattersdiscussedabove,mayresultincostlycomplianceburdensand/ormay otherwise increase our costs. Similarly, increased regulatory focus on our customersmay cause such customers toreducethevolumeoftransactionsprocessedthroughoursystems,ormayotherwiseimpactthecompetitivenessofourproducts.Actions by regulators could influence other organizations around the world to enact or consider adopting similar measures,amplifyinganypotentialcomplianceburden.Finally,failuretocomplywiththelawsandregulationsdiscussedabovetowhichweare subject could result in fines, sanctions or other penalties. In particular, a violation and subsequent judgment or settlementagainstus, or thosewithwhomwemaybeassociated,undereconomic sanctions andAML,CFT, andanti-corruption laws couldsubjectustosubstantialmonetarypenalties,damages,and/orhaveasignificantreputationalimpact.Eachinstancemayindividuallyor collectivelymateriallyandadverselyaffectour financialperformanceand/orouroverallbusinessand resultsofoperations,aswellashaveanimpactonourreputation.

Wecouldbesubjecttoadversechangesintaxlaws,regulationsandinterpretationsorchallengestoourtaxpositions.

WearesubjecttotaxlawsandregulationsoftheU.S.federal,stateandlocalgovernmentsaswellasvariousnon-U.S.jurisdictions.Potential changes in existing tax laws, including future regulatory guidance, may impact our effective income tax rate and taxpayments. Therecanbenoassurancethatchanges in tax lawsor regulations,bothwithintheU.S.andtheother jurisdictions inwhich we operate, will notmaterially and adversely affect our effective income tax rate, tax payments, financial condition andresultsofoperations.Similarly,changesintaxlawsandregulationsthatimpactourcustomersandcounterpartiesortheeconomygenerallymayalsoimpactourfinancialconditionandresultsofoperations.

Inaddition,taxlawsandregulationsarecomplexandsubjecttovaryinginterpretations,andanysignificantfailuretocomplywithapplicabletaxlawsandregulationsinallrelevantjurisdictionscouldgiverisetosubstantialpenaltiesandliabilities.Anychangesinenacted tax laws, rules or regulatory or judicial interpretations; any adverse outcome in connection with tax audits in anyjurisdiction;oranychangeinthepronouncementsrelatingtoaccountingforincometaxescouldmateriallyandadverselyimpactoureffectiveincometaxrate,taxpayments,financialconditionandresultsofoperations.

Litigation

Liabilitieswemay incur or limitations on our business related to any litigation or litigation settlements couldmaterially andadverselyaffectourresultsofoperations.

Weareadefendantonanumberofcivil litigationsandregulatoryproceedingsand investigations, includingamongothers, thosealleging violations of competition and antitrust law and those involving intellectual property claims. See Note 21 (Legal andRegulatoryProceedings)totheconsolidatedfinancialstatementsincludedinPartII,Item8formoredetailsregardingtheallegationscontainedinthesecomplaintsandthestatusoftheseproceedings. Intheeventwearefoundliable inanymaterial litigationsorproceedings,particularly in theeventwemaybe found liable ina large class-action lawsuitoron thebasisof anantitrust claimentitling the plaintiff to treble damages or under which wewere jointly and severally liable, we could be subject to significantdamages,whichcouldhaveamaterialadverseimpactonouroverallbusinessandresultsofoperations.



Certainlimitationshavebeenplacedonourbusinessinrecentyearsbecauseoflitigationandlitigationsettlements,suchaschangesto our no-surcharge rule in the United States. Any future limitations on our business resulting from litigation or litigationsettlementscould impactourrelationshipswithourcustomers, includingreducingthevolumeofbusinessthatwedowiththem,whichmaymateriallyandadverselyaffectouroverallbusinessandresultsofoperations.

BusinessandOperations

COVID-19

TheglobalCOVID-19pandemicandcontainmentmeasurestakeninresponsetoithaveadverselyimpactedourbusiness,resultsofoperationsandfinancialcondition,andmaycontinuetodosodependingonfuturedevelopments,whichareuncertain.

GlobalhealthconcernsrelatingtotheCOVID-19outbreakhave impactedthemacroeconomicenvironment,andtheoutbreakhassignificantly increased economic uncertainty. The outbreak resulted in governments in countries across the globe implementingmeasurestotrytocontainthevirus,suchastravelrestrictions,socialdistancing,andrestrictionsonbusinessoperationswhichhaveimpacted consumers and businesses. These measures have adversely impacted and may further impact our workforce andoperationsand theoperationsofour customers, suppliers andbusinesspartners. While someof thesemeasureshaveeased incertainjurisdictions,othershaveremainedinplace.Theextenttowhichcurrentmeasuresareremovedornewmeasuresareputinplacewilldependhowthepandemicevolves,aswellastheprogressoftheglobalroll-outofvaccines.

ThespreadofCOVID-19hascausedustomodifyourbusinesspractices(includingemployeetravel,employeeworklocations,andworkinginaremoteenvironment),andwemaytakefurtheractionsasrequiredbygovernmentauthoritiesorthatareinthebestinterestsofouremployees,customersandbusinesspartners.Thereisnocertaintythatsuchmeasureswillbesufficienttomitigatetherisksposedbythevirusorotherwisebesatisfactorytogovernmentauthorities.

The COVID-19 pandemic has adversely impacted our business, results of operations and financial condition. There are nocomparablerecenteventswhichmayprovideguidanceastotheeffectofthespreadofCOVID-19andaglobalpandemic,and,asaresult,theultimateimpactofCOVID-19orasimilarhealthepidemicishighlyuncertainandsubjecttochange.TheextenttowhichCOVID-19furtherimpactsourbusiness,resultsofoperationsandfinancialconditionwilldependonfuturedevelopments,whichareuncertain,including,butnotlimitedto,thedurationandspreadoftheoutbreak,itsseverity,theactionstocontainthevirusortreatits impact,andhowquicklyandtowhatextentnormaleconomicandoperatingconditionscanresume. EvenaftertheCOVID-19pandemichassubsided,wemaycontinuetoexperiencemateriallyadverseimpactstoourbusinessandourresultofoperationsasaresultofitsglobaleconomicimpact,includinganyrecessionthathasoccurredormayoccurinthefuture.

CompetitionandTechnology

Substantialandintensecompetitionworldwideintheglobalpaymentsindustrymaymateriallyandadverselyaffectouroverallbusinessandresultsofoperations.

Theglobalpaymentsindustryishighlycompetitive. Ourpaymentprogramscompeteagainstallformsofpayment, includingcashandchecks;electronic,mobileande-commercepaymentplatforms;cryptocurrencies;ACHpaymentservices;andotherpaymentsnetworks,whichcanhaveseveralcompetitiveimpactsonourbusiness:

• Someofourtraditionalcompetitors,aswellasalternativepaymentserviceproviders,mayhavesubstantiallygreaterfinancialandotherresourcesthanwehave,mayofferawiderrangeofprogramsandservicesthanweofferormayusemoreeffectiveadvertisingandmarketingstrategiestoachievebroaderbrandrecognitionormerchantacceptancethanwehave.

• Ourabilitytocompetemayalsobeaffectedbytheoutcomesoflitigation,competition-relatedregulatoryproceedings,centralbankactivityandlegislativeactivity.

Certainofourcompetitorsoperatethree-partypaymentssystemswithdirectconnectionstobothmerchantsandconsumersandthese competitors may derive competitive advantages from their business models. If we continue to attract more regulatoryscrutinythanthesecompetitorsbecauseweoperateafour-partysystem,orweareregulatedbecauseofthesystemweoperateinawayinwhichourcompetitorsarenot,wecouldlosebusinesstothesecompetitors.See“Business-Competition”inPartI,Item1.

If we are not able to differentiate ourselves from our competitors, drive value for our customers and/or effectively align ourresourceswithourgoalsandobjectives,wemaynotbeabletocompeteeffectivelyagainstthesethreats.Ourcompetitorsmayalsointroducetheirown innovativeprogramsandservicesthatadversely impactourgrowth. Beyondourtraditionalcompetitors,wealso compete against new entrants that have developed alternative payments systems, e-commerce payments systems andpaymentssystemsformobiledevices,aswellasphysicalstore locations. AnumberofthesenewentrantsrelyprincipallyontheInternettosupporttheirservicesandmayenjoy lowercoststhanwedo,whichcouldputusatacompetitivedisadvantage. Our



failure to compete effectively against any of the foregoing competitive threats couldmaterially and adversely affect our overallbusinessandresultsofoperations.

Disintermediationfromstakeholdersbothwithinandoutsideofthepaymentsvaluechaincouldharmourbusiness.

Asthepaymentsindustrycontinuestodevelopandchange,wefacedisintermediationandrelatedrisks,including:

• Partiesthatprocessourtransactions incertaincountriesmaytrytoeliminateourpositionasan intermediary inthepaymentprocess.Forexample,merchantscouldswitch(andinsomecasesareswitching)transactionsdirectlywithissuers.Additionally,processorscouldprocesstransactionsdirectlybetweenissuersandacquirers.Largescaleconsolidationwithinprocessorscouldresult in these processors developing bilateral agreements or in some cases switching the entire transaction on their ownnetwork,therebydisintermediatingus.

• Regulation (such as PSD2 in the EEA) may disintermediate issuers by enabling third-party providers opportunities to routepayment transactions away from our network and products and towards other forms of payment by offering accountinformation or payment initiation services directly to those who currently use our products. This may also allow theseprocessors to commoditize the data that are included in the transactions. If our customers are disintermediated in theirbusiness,wecouldfacediminisheddemandforourintegratedproductsandservices.

• Althoughwepartnerwith fintechsandtechnologycompanies (suchasdigitalplayersandmobileproviders) that leverageourtechnology,platformsandnetworkstodelivertheirproducts,theycoulddevelopplatformsornetworksthatdisintermediateusfrom digital payments and impact our ability to compete in the digital economy. This risk is heightened when we haverelationshipswiththeseentitieswhereweshareMastercarddata.Whilewesharethisdatainacontrolledmannersubjecttoapplicable anonymization and privacy and data standards,without proper oversightwe could give the partner a competitiveadvantage.

• Competitors, customers, fintechs, technology companies, governments andother industry participantsmaydevelopproductsthatcompetewithorreplacevalue-addedproductsandserviceswecurrentlyprovidetosupportourswitchedtransactionandpaymentofferings. Theseproductscould replaceourownswitchingandpaymentsofferingsor could forceus tochangeourpricingorpracticesfortheseofferings. Inaddition,governmentsthatdeveloporencouragethecreationofnationalpaymentplatformsmay promote their platforms in such away that could put us at a competitive disadvantage in thosemarkets, orrequireustocompetedifferently.

• Participants in the payments industry may merge, create joint ventures or form other business combinations that maystrengthentheirexistingbusinessservicesorcreatenewpaymentproductsandservices thatcompetewithourproductsandservices.

Ourfailuretocompeteeffectivelyagainstanyoftheforegoingcompetitivethreatscouldmateriallyandadverselyaffectouroverallbusinessandresultsofoperations.

Continuedintensepricingpressuremaymateriallyandadverselyaffectouroverallbusinessandresultsofoperations.

Inordertoincreasetransactionvolumes,enternewmarketsandexpandourMastercard-brandedcardsandenabledproductsandservices,weseektoenterintobusinessagreementswithcustomersthroughwhichweofferincentives,pricingdiscountsandothersupport thatpromoteourproducts. Inorder to stay competitive,wemayhave to increase theamountof these incentives andpricingdiscounts. Wecontinuetoexperiencepricingpressure. Thedemandfromourcustomersforbetterpricingarrangementsand greater rebates and incentivesmoderates our growth. Wemay not be able to continue our expansion strategy to switchadditionaltransactionvolumesortoprovideadditionalservicestoourcustomersatlevelssufficienttocompensateforsuchlowerfeesorincreasedcostsinthefuture,whichcouldmateriallyandadverselyaffectouroverallbusinessandresultsofoperations.Inaddition,increasedpressureonpricesincreasestheimportanceofcostcontainmentandproductivityinitiativesinareasotherthanthoserelatingtocustomerincentives.

Inthefuture,wemaynotbeabletoenterintoagreementswithourcustomersiftheyrequiretermsthatweareunableorunwillingtooffer,andwemayberequiredtomodifyexistingagreementsinordertomaintainrelationshipsandtocompetewithothersintheindustry.Someofourcompetitorsarelargerandhavegreaterfinancialresourcesthanwedoandaccordinglymaybeabletochargelowerpricestoourcustomers.Inaddition,totheextentthatweofferdiscountsorincentivesundersuchagreements,wewillneedtofurtherincreasetransactionvolumesortheamountofservicesprovidedthereunderinordertobenefitincrementallyfromsuchagreementsand to increase revenueandprofit, andwemaynotbe successful indoing so,particularly in the current regulatoryenvironment.Ourcustomersalsomayimplementcostreductioninitiativesthatreduceoreliminatepaymentproductmarketingorincreaserequestsforgreaterincentivesorgreatercoststability.Thesefactorscouldhaveamaterialadverseimpactonouroverallbusinessandresultsofoperations.



Rapid and significant technological developments and changes could negatively impact our overall business and results ofoperationsorlimitourfuturegrowth.

Thepaymentsindustryissubjecttorapidandsignificanttechnologicalchanges,whichcanimpactourbusinessinseveralways:

• Technologicalchanges, includingcontinuingdevelopmentsoftechnologiesintheareasofsmartcardsanddevices,contactlessandmobilepayments,e-commerce, cryptocurrencyandblockchain technology,machine learningandAI, could result innewtechnologies that may be superior to, or render obsolete, the technologies we currently use in our programs and services.Moreover,thesechangescouldresultinnewandinnovativepaymentmethodsandproductsthatcouldplaceusatacompetitivedisadvantageandthatcouldreducetheuseofourproducts.

• Werelyinpartonthirdparties,includingsomeofourcompetitorsandpotentialcompetitors,forthedevelopmentofandaccesstonewtechnologies.Theinabilityofthesecompaniestokeeppacewithtechnologicaldevelopments,ortheacquisitionofthesecompaniesbycompetitors,couldnegativelyimpactourofferings.

• Ourabilitytodevelopandadoptnewservicesandtechnologiesmaybeinhibitedbyindustry-widesolutionsandstandards(suchasthoserelatedtoEMV,tokenizationorothersafetyandsecuritytechnologies),andbyresistancefromcustomersormerchantstosuchchanges.

• Our ability todevelopevolving systemsandproductsmaybe inhibitedbyanydifficultywemayexperience in attracting andretainingtechnologyexperts.

• Ourabilitytoadoptthesetechnologiescanalsobeinhibitedbyintellectualpropertyrightsofthirdparties.Wehavereceived,andwemay in the future receive, noticesor inquiries frompatentholders (for example, otheroperating companiesor non-practicingentities)suggestingthatwemaybeinfringingcertainpatentsorthatweneedto licensetheuseoftheirpatentstoavoidinfringement.Suchnoticesmay,amongotherthings,threatenlitigationagainstusorourcustomersordemandsignificantlicensefees.

• Ourabilitytodevelopnewtechnologiesandreflecttechnologicalchangesinourpaymentsofferingswillrequireresources,whichmayresultinadditionalexpenses.

• Weworkwith fintechs and technology companies (such as digital players andmobile providers) that use our technology toenhance payment safety and security and to deliver their payment-related products and services quickly and efficiently toconsumers.Ourinabilitytokeeppacetechnologicallycouldnegativelyimpactthewillingnessofthesecustomerstoworkwithus,andcouldencouragethemtousetheirowntechnologyandcompeteagainstus.

• Regulatory or government requirements could require us to host and deliver certain products and services on-soil in certainmarkets,whichwouldrequireustoalterourtechnologyanddeliverymodel,potentiallyresultinginadditionalexpenses.

• Various central banks are experimentingwith digital currencies called Central BankDigital Currencies (CBDC). CBDCsmay belaunchedwiththeirownnetworkstotransfermoneybetweenparticipants.PolicyanddesignconsiderationsthatgovernmentsadoptcouldimpacttheextentofourroleinfacilitatingCBDC-basedpaymenttransactions,potentiallyimpactingthetransactions

thatwemayprocessoverournetwork.

Wecannotpredicttheeffectoftechnologicalchangesonourbusiness,andourfuturesuccesswilldepend,inpart,onourabilitytoanticipate,developoradapttotechnologicalchangesandevolvingindustrystandards.Failuretokeeppacewiththesetechnologicaldevelopments or otherwise bring to market products that reflect these technologies could lead to a decline in the use of ourproducts,whichcouldhaveamaterialadverseimpactonouroverallbusinessandresultsofoperations.

Operatingareal-timeaccount-basedpaymentnetworkpresentsrisksthatcouldmateriallyaffectourbusiness.

U.K. regulators have designated Vocalink, our real-time account-based payment network platform, to be a “specified serviceprovider”andregulatorsinothercountriesmayinthefutureexpandtheirregulatoryoversightofreal-timeaccount-basedpaymentsystems in similar ways. In addition, any prolonged service outage on this network could result in quickly escalating impacts,includingpotentialinterventionbytheBankofEnglandandsignificantreputationalrisktoVocalinkandus.Foradiscussionoftheregulatoryrisksrelatedtoourreal-timeaccount-basedpaymentplatform,seeourriskfactor in“RiskFactors-Payments IndustryRegulation”inthisPartI,Item1A.Furthermore,thecomplexityofthispaymenttechnologyrequirescarefulmanagementtoaddresssecurity vulnerabilities that are different from those facedonour core network. Operational difficulties, such as the temporaryunavailabilityofourservicesorproducts,orsecuritybreachesonourreal-timeaccount-basedpaymentnetworkcouldcausealossofbusinessfortheseproductsandservices,resultinpotentialliabilityforusandadverselyaffectourreputation.

Workingwith new customers and end users aswe expand our integrated products and services can present operational andonboardingchallenges,becostlyandresultinreputationaldamageifthenewproductsorservicesdonotperformasintended.

Thepaymentsmarketsinwhichwecompetearecharacterizedbyrapidtechnologicalchange,newproductintroductions,evolvingindustry standards and changing customer and consumer needs. In order to remain competitive and meet the needs of the



paymentsmarkets,wearecontinually involved indiversifyingour integratedproductsandservices. Theseefforts carry the risksassociatedwithanydiversificationinitiative,includingcostoverruns,delaysindeliveryandperformanceproblems.Theseprojectsalsocarryrisksassociatedwithworkingwithdifferenttypesofcustomers,forexampleorganizationssuchascorporationsthatarenot financial institutions and non-governmental organizations (“NGOs”), and end users other than those we have traditionallyworked with. These differences may present new operational challenges in the development and implementation of our newproductsorservices.Thesenewcustomersaretypicallylessregulated,andasaresult,enhancedinfrastructureandmonitoringisrequired.

Ourfailuretodelivertheseintegratedproductsandservicescouldmakeourotherintegratedproductsandserviceslessdesirabletocustomers,orputusatacompetitivedisadvantage.Inaddition,ifthereisadelayintheimplementationofourproductsorservicesorifourproductsorservicesdonotperformasanticipated,orweareunabletoadequatelyanticipaterisksrelatedtonewtypesofcustomers,wecould faceadditional regulatory scrutiny, fines, sanctionsorotherpenalties,whichcouldmateriallyandadverselyaffectouroverallbusinessandresultsofoperations,aswellasnegativelyimpactourbrandandreputation.

InformationSecurityandServiceDisruptions

Informationsecurity incidentsoraccountdatacompromiseeventscoulddisruptourbusiness,damageourreputation, increaseourcostsandcauselosses.

Informationsecurityrisksforpaymentsandtechnologycompaniessuchasourshavesignificantlyincreasedinrecentyearsinpartbecauseoftheproliferationofnewtechnologies,theuseoftheInternetandtelecommunicationstechnologiestoconductfinancialtransactions,andtheincreasedsophisticationandactivitiesoforganizedcrime,hackers,terroristsandotherexternalparties.Thesethreatsmayderivefromfraudormaliceonthepartofouremployeesorthirdparties,ormayresultfromhumanerrororaccidentaltechnologicalfailure.Thesethreatsincludecyber-attackssuchascomputerviruses,maliciouscode,phishingattacksorinformationsecuritybreachesandcouldleadtothemisappropriationofconsumeraccountandotherinformationandidentitytheft.Theadventof the global COVID-19 pandemic has resulted in a significant rise in these types of threats due to a significant portion of ourworkforceworkingfromhomeinamostlyremoteenvironment.

Our operations rely on the secure processing, transmission and storage of confidential, proprietary and other information andtechnologyinourcomputersystemsandnetworks,aswellasthesystemsofourthird-partyproviders.Ourcustomersandotherparties inthepaymentsvaluechain,aswellasaccountholders,relyonourdigital technologies,computersystems,softwareandnetworks to conduct their operations. In addition, to access our integrated products and services, our customers and accountholdersincreasinglyusepersonalsmartphones,tabletPCsandothermobiledevicesthatmaybebeyondourcontrol.We,likeotherfinancialtechnologyorganizations,routinelyaresubjecttocyber-threatsandourtechnologies,systemsandnetworks,aswellasthesystemsofourthird-partyproviders,havebeensubjecttoattemptedcyber-attacks.Becauseofourpositioninthepaymentsvaluechain,webelieve thatweare likely to continue tobea targetof such threatsandattacks. Additionally, geopolitical eventsandresulting government activity could also lead to information security threats and attacks by affected jurisdictions and theirsympathizers.

Todate,wehavenotexperiencedanymaterialimpactrelatingtocyber-attacksorotherinformationsecuritybreaches.However,future attacks or breaches could lead to security breaches of the networks, systems (including third-party provider systems) ordevices that our customers use to access our integrated products and services, which in turn could result in the unauthorizeddisclosure,release,gathering,monitoring,misuse, lossordestructionofconfidential,proprietaryandother information(includingaccount data information) or data security compromises. Such attacks or breaches could also cause service interruptions,malfunctionsorotherfailuresinthephysicalinfrastructureoroperationssystemsthatsupportourbusinessesandcustomers(suchasthelackofavailabilityofourvalue-addedservices),aswellastheoperationsofourcustomersorotherthirdparties.Inaddition,theycouldleadtodamagetoourreputationwithourcustomersandotherpartiesandthemarket,additionalcoststous(suchasrepairingsystems,addingnewpersonnelorprotection technologiesorcompliancecosts), regulatorypenalties, financial losses tobothusandour customersandpartnersand the lossof customersandbusinessopportunities. If suchattacksarenotdetectedimmediately,theireffectcouldbecompounded.

Despitevariousmitigationeffortsthatweundertake,therecanbenoassurancethatwewillbeimmunetotheserisksandnotsuffermaterialbreachesandresultinglossesinthefuture,orthatourinsurancecoveragewouldbesufficienttocoveralllosses.Ourriskand exposure to these matters remain heightened because of, among other things, the evolving nature of these threats, ourprominentsizeandscaleandour role in theglobalpaymentsandtechnology industries,ourplans tocontinueto implementourdigital andmobile channel strategies and develop additional remote connectivity solutions to serve our customers and accountholders when and how they want to be served, our global presence, our extensive use of third-party vendors and future jointventure and merger and acquisition opportunities. As a result, information security and the continued development andenhancementofour controls,processesandpracticesdesigned toprotectour systems, computers, software,dataandnetworks



fromattack,damageorunauthorizedaccessremainapriorityforus.Ascyber-threatscontinuetoevolve,wemayberequiredtoexpendsignificantadditionalresourcestocontinuetomodifyorenhanceourprotectivemeasuresortoinvestigateandremediateanyinformationsecurityvulnerabilities.Anyoftherisksdescribedabovecouldmateriallyadverselyaffectouroverallbusinessandresultsofoperations.

In addition to information security risks forour systems,wealso routinely encounter accountdata compromiseevents involvingmerchantsand third-partypaymentprocessors thatprocess, storeor transmitpayment transactiondata,whichaffectmillionsofMastercard,Visa,Discover,AmericanExpressandother typesof accountholders. Furthereventsof this typemay subjectus toreputational damage and/or lawsuits involvingpaymentproducts carryingour brands. Damage toour reputationor that of ourbrands resulting fromanaccountdatabreachofeitherour systemsor thesystemsofourcustomers,merchantsandother thirdpartiescoulddecreasetheuseandacceptanceofourintegratedproductsandservices.Sucheventscouldalsosloworreversethetrend toward electronic payments. In addition to reputational concerns, the cumulative impact of multiple account datacompromise events could increase the impact of the fraud resulting from such events by, among other things,making it moredifficult to identifyconsumers. Moreover,whilemostof the lawsuits resulting fromaccountdatabreachesdonot involvedirectclaimsagainstusandwhilewehavereleasesfrommanyissuersandacquirers,wecouldstillfacedamageclaims,which,ifupheld,couldmateriallyandadverselyaffectourresultsofoperations.Sucheventscouldhaveamaterialadverseimpactonourtransactionvolumes, resultsofoperationsandprospects for futuregrowth,or increaseourcostsby leadingtoadditional regulatoryburdensbeingimposedonus.

Servicedisruptionsthatcauseustobeunabletoprocesstransactionsorserviceourcustomerscouldmateriallyaffectouroverallbusinessandresultsofoperations.

Our transaction switching systems and other offerings have experienced in limited instances and may continue to experienceinterruptions as a result of technology malfunctions, fire, weather events, power outages, telecommunications disruptions,terrorism,workplaceviolence,accidentsorothercatastrophicevents.Ourvisibilityintheglobalpaymentsindustrymayalsoputusatgreaterriskofattackbyterrorists,activists,orhackerswhointendtodisruptourfacilitiesand/orsystems.Additionally,werelyonthird-partyserviceprovidersforthetimelytransmissionofinformationacrossourglobaldatanetwork.Inadequateinfrastructureinlesser-developedmarketscouldalsoresultinservicedisruptions,whichcouldimpactourabilitytodobusinessinthosemarkets.Ifoneofourserviceprovidersfailstoprovidethecommunicationscapacityorserviceswerequire,asaresultofnaturaldisaster,operationaldisruptions, terrorism,hackingoranyother reason, the failurecould interruptour services. Althoughwemaintainaenterpriseresiliencyprogramtoanalyzerisk,assesspotentialimpacts,anddevelopeffectiveresponsestrategies,wecannotensurethatourbusinesswouldbeimmunetotheserisks,becauseoftheintrinsicimportanceofourswitchingsystemstoourbusiness,anyinterruptionordegradationcouldadverselyaffect theperceptionof thereliabilityofproductscarryingourbrandsandmateriallyadverselyaffectouroverallbusinessandourresultsofoperations.

StakeholderRelationships

Losingasignificantportionofbusinessfromoneormoreofourlargestcustomerscouldleadtosignificantrevenuedecreasesinthelongerterm,whichcouldhaveamaterialadverseimpactonourbusinessandourresultsofoperations.

Mostofourcustomerrelationshipsarenotexclusiveandmaybeterminatedbyourcustomers.Ourcustomerscanreassesstheircommitmentstousatanytimeinthefutureand/ordeveloptheirowncompetitiveservices.Accordingly,ourbusinessagreementswiththesecustomersmaynotreducetheriskinherentinourbusinessthatcustomersmayterminatetheirrelationshipswithusinfavorofrelationshipswithourcompetitors,orforotherreasons,ormightnotmeettheircontractualobligationstous.

Inaddition,asignificantportionofourrevenueisconcentratedamongourfivelargestcustomers.Lossofbusinessfromanyofourlargecustomerscouldhaveamaterialadverseimpactonouroverallbusinessandresultsofoperations.

Exclusive/nearexclusiverelationshipscertaincustomershavewithourcompetitorsmayhaveamaterialadverseimpactonourbusiness.

Certain customers have exclusive, or nearly-exclusive, relationships with our competitors to issue payment products, and theserelationships may make it difficult or cost-prohibitive for us to do significant amounts of business with them to increase ourrevenues. Inaddition,thesecustomersmaybemoresuccessfulandmaygrowfasterthanthecustomersthatprimarily issueourpaymentproducts,whichcouldputusatacompetitivedisadvantage. Furthermore,weearnsubstantialrevenuefromcustomerswith nearly-exclusive relationshipswith our competitors. Such relationships could provide advantages to the customers to shiftbusinessfromustothecompetitorswithwhichtheyareprincipallyaligned.Asignificantlossofourexistingrevenueortransactionvolumesfromthesecustomerscouldhaveamaterialadverseimpactonourbusiness.



Consolidationinthebankingindustrycouldmateriallyandadverselyaffectouroverallbusinessandresultsofoperations.

Thebankingindustryhasundergonesubstantial,acceleratedconsolidationinthepast.Consolidationshaveincludedcustomerswitha substantial Mastercard portfolio being acquired by institutions with a strong relationship with a competitor. If significantconsolidation among customers were to continue, it could result in the substantial loss of business for us, which could have amaterialadverse impactonourbusinessandprospects. Inaddition,oneormoreofourcustomerscouldseektomergewith,oracquire, one of our competitors, and any such transaction could also have a material adverse impact on our overall business.Consolidation couldalsoproducea smallernumberof large customers,which could increase theirbargainingpowerand lead tolowerpricesand/ormorefavorabletermsforourcustomers.Thesedevelopmentscouldmateriallyandadverselyaffectourresultsofoperations.

Ourbusinesssignificantlydependsonthecontinuedsuccessandcompetitivenessofourissuingandacquiringcustomersand,inmanyjurisdictions,theirabilitytoeffectivelymanageorhelpmanageourbrands.

While we work directly withmany stakeholders in the payments system, includingmerchants, governments, fintechs and largedigital companiesandother technology companies,weare, andwill continue tobe, significantlydependentonour relationshipswithourissuersandacquirersandtheirrespectiverelationshipswithaccountholdersandmerchantstosupportourprogramsandservices.Furthermore,wedependonourissuingpartnersandacquirerstocontinuetoinnovatetomaintaincompetitivenessinthemarket.Wedonotissuecardsorotherpaymentdevices,extendcredittoaccountholdersordeterminetheinterestratesorotherfeeschargedtoaccountholders.Eachissuerdeterminestheseandmostothercompetitivepaymentprogramfeatures.Inaddition,we do not establish the discount rate that merchants are charged for acceptance, which is the responsibility of our acquiringcustomers.Asaresult,ourbusinesssignificantlydependsonthecontinuedsuccessandcompetitivenessofourissuingandacquiringcustomersandthestrengthofour relationshipswiththem. In turn,ourcustomers’successdependsonavarietyof factorsoverwhich we have little or no influence, including economic conditions in global financial markets or their disintermediation bycompetitorsoremergingtechnologies,aswellasregulation.Ifourcustomersbecomefinanciallyunstable,wemayloserevenueorwemaybeexposedtosettlementrisk.Seeourriskfactorin“RiskFactors-SettlementandThird-PartyObligations”inthisPartI,Item1Awithrespecttohowweguaranteecertainthird-partyobligationsforfurtherdiscussion.

Withtheexceptionof theUnitedStatesandaselectnumberofother jurisdictions,most in-country (asopposedtocross-border)transactionsconductedusingMastercard,MaestroandCirruscardsareauthorized,clearedandsettledbyourcustomersorotherprocessors.Becausewedonotprovidedomesticswitchingservicesinthesecountriesanddonot,asdescribedabove,havedirectrelationshipswith accountholders,wedependonour closeworking relationshipswithour customers to effectivelymanageourbrands,andtheperceptionofourpaymentssystem,amongconsumersinthesecountries.Wealsorelyonthesecustomerstohelpmanageourbrandsandperceptionamongregulatorsandmerchantsinthesecountries,alongsideourownrelationshipswiththem.From time to time, our customersmay take actions thatwe do not believe to be in the best interests of our payments systemoverall,whichmaymateriallyandadverselyimpactourbusiness.

Merchants’ continued focusonacceptancecostsmay lead toadditional litigationandregulatoryproceedingsand increaseourincentiveprogramcosts,whichcouldmateriallyandadverselyaffectourprofitability.

Merchants are important constituents in our payments system. We rely on both our relationships with them, as well as theirrelationshipswithourissuerandacquirercustomers,tocontinuetoexpandtheacceptanceofourintegratedproductsandservices.Wealsoworkwithmerchants tohelp themenablenewsaleschannels, createbetterpurchaseexperiences, improveefficiencies,increase revenues and fight fraud. In the retail industry, there is a set of largermerchants with increasingly global scope andinfluence. We believe that thesemerchants are having a significant impact on all participants in the global payments industry,includingMastercard.Somelargemerchantshavesupportedthelegal,regulatoryandlegislativechallengestointerchangefeesthatMastercard has been defending, including the U.S. merchant litigations. Somemerchants are increasingly asking regulators toreview and potentially regulate our own network fees, in addition to interchange. See our risk factor in “Risk Factors – OtherRegulation”inthisPartI,Item1Awithrespecttopaymentsindustryregulation,includinginterchangefees.Thecontinuedfocusofmerchantsonthecostsofacceptingvarious formsofpayment, including inconnectionwiththegrowthofdigitalpayments,mayleadtoadditionallitigationandregulatoryproceedings.

Certain larger merchants are also able to negotiate incentives from us and pricing concessions from our issuer and acquirercustomersasaconditiontoacceptingourproducts.Wealsomakepaymentstocertainmerchantstoincentivizethemtocreateco-brandedpaymentprogramswithus. Asmerchantsconsolidateandbecomeevenlarger,wemayhaveto increasetheamountofincentivesthatweprovidetocertainmerchants,whichcouldmateriallyandadverselyaffectourresultsofoperations.Competitiveand regulatory pressures on pricing could make it difficult to offset the costs of these incentives. Additionally, if the rate ofmerchantacceptancegrowthslowsourbusinesscouldsuffer.



Our work with governments exposes us to unique risks that could have a material impact on our business and results ofoperations.

Aswe increaseourworkwithnational, stateand local governments,both indirectly through financial institutionsandwith themdirectlyasourcustomers,wemayfacevariousrisks inherent inassociatingorcontractingdirectlywithgovernments. Theserisksinclude,butarenotlimitedto,thefollowing:

• Governmentalentitiestypicallyfundprojectsthroughappropriatedmonies.Changesingovernmentalprioritiesorotherpoliticaldevelopments, includingdisruptions ingovernmentaloperations, could impactapproved fundingand result in changes in thescope,or leadtothetermination,of thearrangementsorcontractsweor financial institutionsenter intowithrespect toourpaymentproductsandservices.

• Our work with governments subjects us to U.S. and international anti-corruption laws, including the U.S. Foreign CorruptPracticesActandtheU.K.BriberyAct.Aviolationandsubsequentjudgmentorsettlementundertheselawscouldsubjectustosubstantialmonetarypenaltiesanddamagesandhaveasignificantreputationalimpact.

• Workingorcontractingwithgovernments,eitherdirectlyorviaourfinancialinstitutioncustomers,cansubjectustoheightenedreputationalrisks,includingextensivescrutinyandpublicity,aswellasapotentialassociationwiththepoliciesofagovernmentasaresultofabusinessarrangementwiththatgovernment.Anynegativepublicityornegativeassociationwithagovernmententity,regardlessofitsaccuracy,mayadverselyaffectourreputation.

SettlementandThird-PartyObligations

Ourroleasguarantor,aswellasothercontractualobligations,exposeustoriskoflossorilliquidity.

Weareaguarantorofcertainthird-partyobligations,includingthoseofcertainofourcustomers.Inthiscapacity,weareexposedtocredit and liquidity risk from these customers and certain service providers. Wemay incur significant losses in connectionwithtransaction settlements if a customer fails to fund its daily settlement obligations due to technical problems, liquidity shortfalls,insolvencyorotherreasons.Concurrentsettlementfailuresofmorethanoneofourlargercustomersorofseveralofoursmallercustomerseitheronagivendayoroveracondensedperiodoftimemayexceedouravailableresourcesandcouldmateriallyandadverselyaffectourresultsofoperations.

We have significant contractual indemnification obligations with certain customers. Should an event occur that triggers theseobligations,suchaneventcouldmateriallyandadverselyaffectouroverallbusinessandresultofoperations.

GlobalEconomicandPoliticalEnvironment

Globaleconomic,political,financialandsocietaleventsorconditionscouldresultinamaterialandadverseimpactonouroverallbusinessandresultsofoperations.

Adverseeconomictrendsinkeycountries inwhichweoperatemayadverselyaffectourfinancialperformance. Suchimpactmayinclude,butisnotlimitedto,thefollowing:

• Customers mitigating their economic exposure by limiting the issuance of newMastercard products and requesting greaterincentiveorgreatercoststabilityfromus

• Consumersandbusinessesloweringspending,whichcouldimpactdomesticandcross-borderspend

• Government intervention (including the effect of laws, regulations and/or government investments on or in our financialinstitutioncustomers),aswellasuncertaintyduetochangingpoliticalregimesinexecutive,legislativeand/orjudicialbranchesofgovernment,thatmayhavepotentialnegativeeffectsonourbusinessandourrelationshipswithcustomersorotherwisealtertheirstrategicdirectionawayfromourproducts

• Tighteningofcreditavailabilitythatcouldimpacttheabilityofparticipatingfinancialinstitutionstolendtousunderthetermsofourcreditfacility

Additionally,weswitchsubstantiallyallcross-bordertransactionsusingMastercard,MaestroandCirrus-brandedcardsandgenerateasignificantamountofrevenuefromcross-bordervolumefeesandfeesrelatedtoswitchedtransactions.Revenuefromswitchingcross-border and currency conversion transactions for our customers fluctuateswith the levels and destinations of cross-bordertravel and our customers’ need for transactions to be converted into their base currency. Cross-border activity has, and maycontinuetobe,adverselyaffectedbyworldgeopolitical,economic,health,weatherandotherconditions.TheseincludeCOVID-19,aswellasthethreatofterrorismandseparateoutbreaksofflu,virusesandotherdiseases,aswellasmajorenvironmentalevents(includingthoserelatedtoclimatechange).Theuncertaintythatcouldresultfromsucheventscoulddecreasecross-borderactivity.Additionally,anyregulationof interregional interchangefeescouldalsonegatively impactourcross-borderactivity. Ineachcase,decreasedcross-borderactivitycoulddecreasetherevenuewereceive.



Our operations as a global payments network rely in part on global interoperable standards to help facilitate safe and simplepayments. To the extent geopolitical events result in jurisdictions no longer participating in the creation or adoption of thesestandards,orthecreationofcompetingstandards,theproductsandservicesweoffercouldbenegativelyimpacted.

Anyofthesedevelopmentscouldhaveamaterialadverseimpactonouroverallbusinessandresultsofoperations.

Adversecurrencyfluctuationsandforeignexchangecontrolscouldnegativelyimpactourresultsofoperations.

During2020,approximately67%ofour revenuewasgenerated fromactivitiesoutside theUnitedStates. This revenue (and therelatedexpense)couldbetransactedinanon-functionalcurrencyorvaluedbasedonacurrencyotherthanthefunctionalcurrencyoftheentitygeneratingtherevenues.Resultingexchangegainsandlossesareincludedinournetincome.Ourriskmanagementactivitiesprovideprotectionwithrespecttoadversechangesinthevalueofonlyalimitednumberofcurrenciesandarebasedonestimatesofexposurestothesecurrencies.

Inaddition,someoftherevenuewegenerateoutsidetheUnitedStatesissubjecttounpredictablecurrencyfluctuationsincludingdevaluation of currencieswhere the values of other currencies change relative to theU.S. dollar. If theU.S. dollar strengthenscomparedtocurrenciesinwhichwegeneraterevenue,thisrevenuemaybetranslatedatamateriallyloweramountthanexpected.Furthermore,wemaybecomesubject toexchangecontrol regulations thatmight restrictorprohibit theconversionofourotherrevenuecurrenciesintoU.S.dollars,suchaswhatwehaveexperiencedinVenezuela.

Theoccurrenceofcurrencyfluctuationsorexchangecontrolscouldhaveamaterialadverseimpactonourresultsofoperations.

BrandandReputationalImpact

Negativebrandperceptionmaymateriallyandadverselyaffectouroverallbusiness.

Ourbrandsandtheirattributesarekeyassetsofourbusiness.Theabilitytoattractconsumerstoourbrandedproductsandretainthem depends upon the external perception of us and our industry. Our business may be affected by actions taken by ourcustomers,merchantsorotherorganizationsthatimpacttheperceptionofourbrandsorthepaymentsindustryingeneral.Fromtime to time,our customersmay takeactions thatwedonotbelieve tobe in thebest interestsofourbrands, suchas creditorpracticesthatmaybeviewedas“predatory”.Moreover,adversedevelopmentswithrespecttoourindustryortheindustriesofourcustomersorothercompaniesandorganizationsthatuseourproductsandservices(includingcertain legallypermissiblebuthighriskmerchantcategories,suchasalcohol,tobacco,fire-armsandadultcontent)mayalso,byassociation,impairourreputation,orresult in greater public, regulatory or legislative scrutiny. We have also been pursuing the use of social media channels at anincreasinglyrapidpace.Undersomecircumstances,ouruseofsocialmedia,ortheuseofsocialmediabyothersasachannelforcriticism or other purposes, could also cause rapid, widespread reputational harm to our brands by disseminating rapidly andgloballyactualorperceiveddamaginginformationaboutus,ourproductsormerchantsorotherenduserswhoutilizeourproducts.Totheextentanyofourpublishedsustainabilitymetricsaresubsequentlyviewedasinaccurateorweareunabletoexecuteonoursustainability initiatives, we may be viewed negatively by consumers, investors and other stakeholders concerned about thesematters.Also,asweareheadquarteredintheUnitedStates,anegativeperceptionoftheUnitedStatescouldimpacttheperceptionofourcompany,whichcouldadverselyaffectourbusiness.Anyoftheaboveissuescouldhaveamaterialandadverseeffecttoouroverallbusiness.

Lackofvisibilityofourbrandinourproductsandservices,orintheproductsandservicesofourpartnerswhouseourtechnology,maymateriallyandadverselyaffectourbusiness.

Asmoreplayersentertheglobalpaymentssystem,thelayersbetweenourbrandandconsumersandmerchantsincrease.Inorderto competewith other powerful consumer brands that are also becoming part of the consumer payment experience,we oftenpartnerwith thosebrandsonpayment solutions. Thesebrands include largedigital companiesandother technologycompanieswhoareourcustomersanduseournetworkstobuildtheirownacceptancebrands.Insomecases,ourbrandmaynotbefeaturedin the payment solutionormaybe secondary to other brands. Additionally, as part of our relationshipswith some issuers, ourpaymentbrandisonlyincludedonthebackofthecard.Asaresult,ourbrandmayeitherbeinvisibletoconsumersormaynotbetheprimarybrandwithwhichconsumersassociatethepaymentexperience.Thisbrandinvisibility,oranyconsumerconfusionastoourroleintheconsumerpaymentexperience,coulddecreasethevalueofourbrand,whichcouldadverselyaffectourbusiness.



TalentandCulture

Wemaynotbeabletoattract,hireandretainahighlyqualifiedanddiverseworkforce,ormaintainourcorporateculture,whichcouldimpactourabilitytogroweffectively.

Our performance largely depends on the talents and efforts of our employees, particularly our key personnel and seniormanagement. We may be unable to retain or to attract highly qualified employees. The market for key personnel is highlycompetitive,particularly in technologyandother skill areas significant toourbusiness. Additionally, changes in immigrationandworkpermitlawsandvisaregulationsandrelatedenforcementhavemadeitdifficultforemployeestoworkin,ortransferamong,jurisdictions inwhichwehaveoperationsandcould impairourability toattractand retainqualifiedemployees. Moreover,asaresultof theglobalCOVID-19pandemic, a significantportionofourworkforce isworking inamostly remoteenvironment. Thisremote environment may continue after the pandemic due to potential resulting trends, and could impact the quality of ourcorporateculture.Failuretoattract,hire,develop,motivateandretainhighlyqualifiedanddiverseemployeetalent,ortomaintainacorporateculturethatfostersinnovation,creativityandteamworkcouldharmouroverallbusinessandresultsofoperations.

Werelyonkeypersonneltoleadwithintegrityanddecency.Totheextentourleadersbehaveinamannerthatisnotconsistentwithourvalues,wecouldexperiencesignificantimpacttoourbrandandreputation,aswellastoourcorporateculture.

Acquisitions

Acquisitions,strategicinvestmentsorentryintonewbusinessescouldbeimpactedbyregulatoryscrutiny,andifsuccessful,coulddisruptourbusinessandharmourresultsofoperationsorreputation.

As we continue to evaluate our strategic acquisitions of, or acquiring interests in joint ventures or other entities related to,complementary businesses, products or technologies, we face increasing regulatory scrutinywith respect to antitrust and otherconsiderations.Suchscrutinycouldpreventusfromsuccessfullycompletingsuchacquisitionsinthefuture.

Totheextentwedomaketheseacquisitions,wemaynotbeabletosuccessfullypartnerwithor integratethem,despiteoriginalintentionsandfocusedefforts.Inaddition,suchanintegrationmaydivertmanagement’stimeandresourcesfromourcorebusinessanddisruptouroperations.Moreover,wemayspendtimeandmoneyonacquisitionsorprojectsthatdonotmeetourexpectationsor increaseour revenue. To theextentwepay thepurchasepriceof anyacquisition in cash, itwould reduceour cash reservesavailabletousforotheruses,andtotheextentthepurchasepriceispaidwithourstock,itcouldbedilutivetoourstockholders.Furthermore,wemaynotbeabletosuccessfully financethebusiness followingtheacquisitionasaresultofcostsofoperations,includinganylitigationriskwhichmaybeinheritedfromtheacquisition.

Anyacquisitionorentryintoanewbusinesscouldsubjectustonewregulations,bothdirectlyasaresultofthenewbusinessaswellasintheotherexistingpartsofourbusiness,withwhichwewouldneedtocomply.Thiscompliancecouldincreaseourcosts,andwe could be subject to liability or reputational harm to the extent we cannot meet any such compliance requirements. Ourexpansionintonewbusinessescouldalsoresultinunanticipatedissueswhichmaybedifficulttomanage.

ClassACommonStockandGovernanceStructureProvisionsinourorganizationaldocumentsandDelawarelawcouldbeconsideredanti-takeoverprovisionsandhaveanimpactonchange-in-control.

Provisionscontained inouramendedandrestatedcertificateof incorporationandbylawsandDelaware lawcouldbeconsideredanti-takeover provisions, including provisions that could delay or prevent entirely amerger or acquisition that our stockholdersconsiderfavorable.Theseprovisionsmayalsodiscourageacquisitionproposalsorhavetheeffectofdelayingorpreventingentirelya change in control, which could harm our stock price. For example, subject to limited exceptions, our amended and restatedcertificateofincorporationprohibitsanypersonfrombeneficiallyowningmorethan15%ofanyoftheClassAcommonstockoranyotherclassorseriesofourstockwithgeneralvotingpower,ormorethan15%ofourtotalvotingpower.Inaddition:

• ourstockholdersarenotentitledtotherighttocumulatevotesintheelectionofdirectors

• ourstockholdersarenotentitledtoactbywrittenconsent

• avoteof80%ormoreofalloftheoutstandingsharesofourstockthenentitledtovoteisrequiredforstockholderstoamendanyprovisionofourbylaws

• any representative of a competitor ofMastercard or ofMastercard Foundation is disqualified from service on our board ofdirectors



MastercardFoundation’ssubstantialstockownership,andrestrictionsonitssales,mayimpactcorporateactionsoracquisitionproposalsfavorableto,orfavoredby,theotherpublicstockholders.

AsofFebruary9,2021,MastercardFoundationowned108,210,635sharesofClassAcommonstock, representingapproximately11.0%ofourgeneralvotingpower.MastercardFoundationmaynotsellorotherwisetransferitssharesofClassAcommonstockpriortoMay1,2027,excepttotheextentnecessarytosatisfyitscharitabledisbursementrequirements,forwhichpurposeearliersalesarepermittedandhaveoccurred. MastercardFoundation ispermittedtosellallof its remainingsharesafterMay1,2027,subjecttocertainconditions.ThedirectorsofMastercardFoundationarerequiredtobeindependentofusandourcustomers.TheownershipofClassAcommonstockbyMastercardFoundation,togetherwiththerestrictionsontransfer,coulddiscourageormakemoredifficult acquisitionproposals favoredby theotherholdersof theClassA commonstock. Inaddition,becauseMastercardFoundationisrestrictedfromsellingitssharesforanextendedperiodoftime,itmaynothavethesameinterestinshortormedium-termmovementsinourstockpriceas,orincentivetoapproveacorporateactionthatmaybefavorableto,ourotherstockholders.

Item1B.UnresolvedstaffcommentsNotapplicable.

Item2.PropertiesWeownourcorporateheadquarters,locatedinPurchase,NewYork,andourprincipaltechnologyandoperationscenter,locatedinO’Fallon,Missouri. AsofDecember31,2020,Mastercardanditssubsidiariesownedor leasedcommercialpropertiesthroughouttheU.S.andothercountriesaroundtheworld,consistingofcorporateandregionaloffices,aswellasouroperationscenters.

Webelievethatourfacilitiesaresuitableandadequateforthebusinessthatwecurrentlyconduct.However,weperiodicallyreviewour space requirements andmay acquire or lease new space tomeet the needs of our business, or consolidate and dispose offacilitiesthatarenolongerrequired.

Item3.LegalproceedingsRefer toNote13 (AccruedExpensesandAccruedLitigation)andNote21 (LegalandRegulatoryProceedings) to theconsolidatedfinancialstatementsincludedinPartII,Item8.

Item4.MineSafetyDisclosuresNotapplicable.



Informationaboutourexecutiveofficers(asofFebruary12,2021)

NameCurrentPosition Age PreviousMastercardExperience PreviousBusinessExperience

AjayBangaExecutiveChairmansinceJanuary2021

61 ChiefExecutiveOfficer(2020)

PresidentandChiefExecutiveOfficer(2010-2020)

PresidentandCOO(2009-2010)

SeveralexecutivepositionsatCitigroup,includingCEO,AsiaPacificregionandChairmanandCEO,InternationalGlobalConsumerGroup

PreviousseniorleadershipexperienceatNestléIndiaandPepsiCoinrolesofincreasingresponsibility

AjayBhallaPresident,CyberandIntelligenceSolutionssinceNovember2018

55 President,EnterpriseSecuritySolutions(2014-2018)

President,DigitalGatewayServices(2011-2013)

President,SouthAsiaandSoutheastAsia(2008-2011)

Variousseniorleadershippositions,includingPresident,SoutheastAsia;CountryManager,SingaporeandHeadofMarketing,SoutheastAsia;VicePresident

VariousleadershippositionsatHSBCandXeroxCorporation

AnnCairnsViceChairmansinceJune2018

64 President,International(2011-2018) Managingdirector,Alvarez&Marsal

CEO,ABNAMRO

SeniorcorporateandinvestmentbankingrolesatCitigroup

GilbertoCaldartPresident,InternationalsinceJune2018

61 President,LatinAmericaandCaribbeanregion(2013-2018)

DivisionPresident,SouthLatinAmerica/Brazil(2008-2013)

VariousleadershippositionsatCitigroup,includingCountryBusinessManager,Brazil

MichaelFraccaroChiefPeopleOfficersinceJuly2016

55 ExecutiveVicePresident,HumanResources,GlobalProductsandSolutions(2014-2016)

SeniorVicePresident,HumanResources,GlobalProductsandSolutions(2012-2014)

Variousexecutive-levelhumanresourcespositionsatHSBCGroup,HongKong(2000-2012)

VariousseniorhumanresourcespositionsinbankingandfinancialservicesinAustraliaandtheMiddleEast

MichaelFromanViceChairmanandPresident,StrategicGrowthsinceApril2018

58 Mr.FromanjoinedtheCompanyin2018inhiscurrentrole

U.S.TradeRepresentativeintheExecutiveOfficeofPresidentObama(2013-2017)

AssistanttothePresidentandDeputyNationalSecurityAdvisorforInternationalEconomicPolicy(2009-2013)

VariousseniorleadershippositionsatCitigroup,includingCEO,CitiInsuranceandCOOofCitigroup’salternativeinvestmentsbusiness

PARTIEXECUTIVEOFFICERS



LindaKirkpatrickPresident,NorthAmericasinceJanuary2021

44 President,U.S.Issuers(2020)

ExecutiveVicePresident,MerchantsandAcceptance(2016-2020)

SeniorVicePresident,CoreMerchants(2013-2016)

SeniorVicePresident,FranchiseDevelopment(2011-2013)

VicePresident,U.S.Region(2008-2011)

VicePresident,InvestorRelations

EdwardMcLaughlinPresident,OperationsandTechnologysinceMay2017

55 ChiefInformationOfficer(2016-2017)

ChiefEmergingPaymentsOfficer(2010-2015)

Variousseniorleadershiproles,includingChiefFranchiseDevelopmentOfficerandSeniorVicePresident,BillPaymentandHealthcare

GroupVicePresident,ProductandStrategy,MetavanteCorporation

Co-FounderandCEO,Paytrust,Inc.

SachinMehraChiefFinancialOfficersinceApril2019

50 ChiefFinancialOperationsOfficer(2018-2019)

ExecutiveVicePresident,CommercialProducts(2015-2018)

ExecutiveVicePresidentandBusinessFinancialOfficer,NorthAmerica(2013-2015)

CorporateTreasurer(2010-2013)

VariousseniorpositionsatHessCorporation,includingVicePresidentandTreasurer

Variousseniortreasuryandfinancepositions,GeneralMotorsCorporationandGMAC

MichaelMiebachPresidentandChiefExecutiveOfficersinceJanuary2021

53 President(2020)

ChiefProductOfficer(2016-2020)

President,MiddleEastandAfrica(2010-2015)

ManagingDirector,MiddleEastandNorthAfricaandManagingDirector,Sub-SaharanAfrica,BarclaysBankPLC

VariousexecutivepositionsatCitigroupinGermany,Austria,U.K.andTurkey

TimMurphyGeneralCounselsinceApril2014

53 ChiefProductOfficer(2009-2014)

Variousseniorleadershiproles,includingPresident,U.S.Region;ExecutiveVicePresident,CustomerBusinessPlanningandAnalysis;andSeniorVicePresidentandAssociateGeneralCounsel

Associate,Cleary,Gottlieb,SteenandHamilton,NewYorkandLondon

RajaRajamannarChiefMarketingandCommunicationsOfficerandPresident,HealthcaresinceJanuary2016

59 ChiefMarketingOfficer(2013-2015) ExecutiveVicePresident-SeniorBusinessandChiefTransformationOfficer,Anthem(formerly,WellPoint,Inc.)(2012-2013)

SeniorVicePresidentandChiefInnovationandMarketingOfficer,HumanaInc.(2009-2012)

VariousmanagementpositionsatCitigroup,includingExecutiveVicePresidentandChiefMarketingOfficer-CitiGlobalCards




RajSeshadriPresident,DataandServicessinceJanuary2020

55 President,U.S.Issuers(2016-2019) ManagingDirector,HeadofiSharesU.S.WealthAdvisorybusiness,BlackRock(2014-2016)

ManagingDirector,GlobalMarketingOfficerofiShares,BlackRock,Inc.(2012-2014)

VariousleadershippositionsatCitigroup,U.S.TrustCompanyandMcKinsey&Company,Inc.

KevinStantonChiefTransformationOfficersinceJanuary2020

59 ChiefServicesOfficer(2018-2019)

President,MastercardAdvisors(2010-2017)

Variousseniorleadershiproles,includingPresident,Canada;SeniorVicePresident,StrategyandMarketDevelopment;andVicePresident,SeniorCounselandNorthAmericaRegionCounsel

VicePresident,Counsel,ShawmutNationalCorporation

CraigVosburgChiefProductOfficersinceJanuary2021

53 President,NorthAmerica(2016-2020)

ChiefProductOfficer(2014-2015)

ExecutiveVicePresident,U.S.MarketDevelopment(2010-2014)

Variousseniorleadershiproles,includingHeadofMastercardAdvisors,U.S.andCanadaandHeadofMastercardAdvisors,SoutheastAsia,GreaterChinaandSouthAsia/MiddleEast/Africa

Seniormember-financialservicespractice,Bain&CompanyandA.T.Kearney

Vicepresident,CoreStatesFinancialCorporation



PARTIIItem5.Marketforregistrant’scommonequity,relatedstockholdermattersandissuerpurchasesofequitysecurities

Item6.Selectedfinancialdata

Item7.Management’sdiscussionandanalysisoffinancialconditionandresultsofoperations

Item7A.Quantitativeandqualitativedisclosuresaboutmarketrisk

Item8.Financialstatementsandsupplementarydata

Item9.ChangesinanddisagreementswithaccountantsonaccountingandfinancialdisclosureItem9A.Controlsandprocedures

Item9B.Otherinformation

Item 5. Market for registrant’s common equity, relatedstockholdermattersandissuerpurchasesofequitysecuritiesOur Class A common stock trades on the New York Stock Exchange under the symbol “MA”. At February 9, 2021, we had 73stockholdersofrecordforourClassAcommonstock.WebelievethatthenumberofbeneficialownersissubstantiallygreaterthanthenumberofrecordholdersbecausealargeportionofourClassAcommonstockisheldin“streetname”bybrokers.

There iscurrentlynoestablishedpublic tradingmarket forourClassBcommonstock. Therewereapproximately257holdersofrecordofournon-votingClassBcommonstockasofFebruary9,2021,constitutingapproximately0.8%ofour totaloutstandingequity.

StockPerformanceGraphThegraphandtablebelowcomparethecumulativetotalstockholderreturnofMastercard’sClassAcommonstock,theS&P500andtheS&P500Financials for the five-yearperiodendedDecember31,2020. Thegraphassumesa$100 investment inourClassAcommonstockandbothoftheindicesandthereinvestmentofdividends.Mastercard’sClassBcommonstockisnotpubliclytradedorlistedonanyexchangeordealerquotationsystem.

Comparisonofcumulativefive-yeartotalreturn

Totalreturnstostockholdersforeachoftheyearspresentedwereasfollows:

Baseperiod

IndexedReturns

FortheYearsEndedDecember31,

Company/Index 2015 2016 2017 2018 2019 2020

Mastercard $ 100.00 $ 106.91 $ 157.88 $ 197.86 $ 314.91 $ 378.44

S&P500 100.00 111.96 136.40 130.42 171.49 203.04

S&P500Financials 100.00 122.80 150.04 130.49 172.41 169.49

PARTIIITEM5.MARKETFORREGISTRANT'SCOMMONEQUITY,RELATEDSTOCKHOLDERMATTERSANDISSUESPURCHASESOF


DividendDeclarationandPolicyOnDecember8,2020,ourBoardofDirectorsdeclaredaquarterlycashdividendof$0.44per sharepaidonFebruary9,2021 toholdersofrecordonJanuary8,2021ofourClassAcommonstockandClassBcommonstock.OnFebruary8,2021,ourBoardofDirectorsdeclaredaquarterlycashdividendof$0.44persharepayableonMay7,2021toholdersofrecordonApril9,2021ofourClassAcommonstockandClassBcommonstock.

Subjecttolegallyavailablefunds,weintendtocontinuetopayaquarterlycashdividendonouroutstandingClassAcommonstockandClassB common stock. However, thedeclaration andpaymentof futuredividends is at the solediscretionof ourBoardofDirectorsaftertakingintoaccountvariousfactors,includingourfinancialcondition,operatingresults,availablecashandcurrentandanticipatedcashneeds.

IssuerPurchasesofEquitySecuritiesDuringthefourthquarterof2020,werepurchasedatotalofapproximately3.1millionsharesfor$1.03billionatanaveragepriceof$330.34pershareofClassAcommonstock.SeeNote16(Stockholders'Equity)totheconsolidatedfinancialstatementsincludedinPartII, Item8forfurtherdiscussionwithrespecttooursharerepurchaseprograms. Thefollowingtablepresentsourrepurchaseactivityonacashbasisduringthefourthquarterof2020:

Period

TotalNumberofSharesPurchased

AveragePricePaidperShare(including

commissioncost)

TotalNumberofSharesPurchasedas

PartofPubliclyAnnouncedPlansor

Programs

DollarValueofSharesthatmayyetbePurchasedunder

thePlansorPrograms1

October1–31 1,552,273 $ 335.39 1,552,273 $ 4,340,730,451

November1–30 779,892 314.13 779,892 4,095,745,017

December1–31 785,846 336.44 785,846 9,831,351,292

Total 3,118,011 330.34 3,118,0111 Dollarvalueofsharesthatmayyetbepurchasedunderthesharerepurchaseprogramsareasoftheendofeachperiodpresented.

PARTIIITEM5.MARKETFORREGISTRANT'SCOMMONEQUITY,RELATEDSTOCKHOLDERMATTERSANDISSUESPURCHASESOF


Item6.SelectedfinancialdataThe statementofoperationsdata and the cashdividendsdeclaredper share for the years endedDecember31,2020, 2019and2018,andthebalancesheetdataasofDecember31,2020and2019,arepresentedintheauditedconsolidatedfinancialstatementsofMastercardIncorporatedincludedinPartII,Item8.ThestatementofoperationsdataandthecashdividendsdeclaredpersharefortheyearsendedDecember31,2017and2016,andthebalancesheetdataasofDecember31,2018,2017and2016,arenotincludedinthisReport,andareprovidedinPartII, Item8ofourAnnualReportsonForm10-KfortheyearsendedDecember31,2018,2017and2016.

PARTIIITEM6.SELECTEDFINANCIALDATA


Item 7. Management’s discussion and analysis of financialconditionandresultsofoperationsThe following discussion should be read in conjunction with the consolidated financial statements and notes of MastercardIncorporated and its consolidated subsidiaries, including Mastercard International Incorporated (“Mastercard International”)(together, “Mastercard” or the “Company”), included elsewhere in this Report. Percentage changes provided throughout“Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperations”werecalculatedonamountsroundedtothenearestthousand.FordiscussionrelatedtotheresultsofoperationsfortheyearendedDecember31,2019comparedtotheyearendedDecember31,2018,pleaseseePartII,Item7ofourAnnualReportonForm10-KfortheyearendedDecember31,2019.

BusinessOverviewMastercard is a technology company in the global payments industry that connects consumers, financial institutions,merchants,governments, digital partners, businesses andother organizationsworldwide, enabling them touse electronic formsof paymentinstead of cash and checks. Wemake payments easier andmore efficient by providing awide range of payment solutions andservicesusingourfamilyofwell-knownbrands,includingMastercard®,Maestro®andCirrus®.Weoperateamulti-railnetworkthatofferscustomersonepartnertoturntofortheirdomesticandcross-borderpaymentneeds.Throughouruniqueandproprietaryglobalpaymentsnetwork,whichwerefertoasourcorenetwork,weswitch(authorize,clearandsettle)paymenttransactionsanddeliver related products and services. We have additional payment capabilities that include automated clearing house (“ACH”)transactions(bothbatchandreal-timeaccount-basedpayments). Wealsoprovideintegratedvalue-addedofferingssuchascyberandintelligenceproducts,informationandanalyticsservices,consulting,loyaltyandrewardprograms,processingandopenbanking.Ourpaymentsolutionsoffercustomerschoiceandflexibilityandaredesignedtoensuresafetyandsecurityfortheglobalpaymentssystem.

Atypicaltransactiononourcorenetworkinvolvesfourparticipantsinadditiontous:accountholder(apersonorentitywhoholdsacardorusesanotherdeviceenabled forpayment), issuer (theaccountholder’s financial institution),merchantandacquirer (themerchant’sfinancial institution). Wedonot issuecards,extendcredit,determineorreceiverevenuefrominterestratesorotherfeeschargedtoaccountholdersbyissuers,orestablishtherateschargedbyacquirersinconnectionwithmerchants’acceptanceofourproducts.Inmostcases,accountholderrelationshipsbelongto,andaremanagedby,ourcustomers.

COVID-19

Thecoronavirus(“COVID-19”)pandemichasspreadrapidlyacrosstheglobeandhashadsignificantnegativeeffectsontheglobaleconomy. This outbreak has affected business activity, adversely impacting consumers, our customers, suppliers and businesspartners,aswellasourworkforce.Wecontinuetomonitortheeffectsofthepandemicandactionstakenbygovernmentsastheyrelatetotravelrestrictions,socialdistancingmeasuresandrestrictionsonbusinessoperations,aswellasthecontinuedimpactofthese actions on consumers and businesses. While some of these measures have eased in certain jurisdictions, others haveremainedinplace.Theextenttowhichcurrentmeasuresareremovedornewmeasuresareputinplacewilldependuponhowthepandemicevolves,aswellastheprogressoftheglobalroll-outofvaccines.

TheCOVID-19outbreakaffectedour2020performance,duringwhichwenotedunfavorabletrendscomparedtohistoricalperiods.Thefollowingtableprovidesasummaryoftrendsinourkeymetricsfor2020ascomparedtotherespectiveperiodsin2019:

Quarterended YearendedDecember31March31 June30 September30 December31

Increase/(Decrease)

Grossdollarvolume(localcurrencybasis) 8% (10)% 1% 1% —%

Cross-bordervolume(localcurrencybasis) (1)% (45)% (36)% (29)% (29)%

Switchedtransactions 13% (10)% 5% 4% 3%

Theimpactofthisoutbreakstartedinthefirstquarterof2020asweexperienceddeclinesinourkeymetricscomparedtohistoricalperiods,primarilyduetotravelrestrictionsandstay-at-homeorders implementedbygovernments inmanyregionsandcountriesacrosstheglobe.Ourkeymetricscontinuedtobeimpactedthroughout2020asfollows:

• Grossdollarvolumeswereflatin2020ascomparedto2019,recoveringgraduallyinthesecondhalfoftheyearfromadeclineduringthesecondquarterinpartduetotheglobalrelaxationofbothrestrictionsonbusinessoperationsandsocialdistancingmeasures.

PARTIIITEM7.MANAGEMENT’SDISCUSSIONANDANALYSISOFFINANCIALCONDITIONANDRESULTSOFOPERATIONS


• Cross-bordervolumeswerenegativelyimpactedbythepandemicduring2020duetoasignificantdecreaseinglobaltravelasaresultofcompliancewithtravelrestrictionsandquarantinerequirements.Whilecross-bordervolumesarestilllowercomparedtoprioryearperiods,thesevolumeshaveimprovedthroughoutthesecondhalfof2020.

• Switched transactions were negatively impacted by the pandemic primarily in the second quarter. Subsequently, switchedtransactions improvedduringthethirdquarter inpartduetotheglobalrelaxationofbothrestrictionsonbusinessoperationsand social distancingmeasures. During the fourthquarter, switched transactions growth slowed slightly as compared to thethirdquarter.

The full extent towhich the pandemic, andmeasures taken in response, affect our business, results of operations and financialconditionwilldependonfuturedevelopments,includingthedurationofthepandemicanditsimpactontheglobaleconomy,whichareuncertain,andcannotbepredictedatthistime.

FinancialResultsOverviewThefollowingtableprovidesasummaryofourkeyGAAPoperatingresults,asreported:

YearendedDecember31, 2020Increase/(Decrease)

2019Increase/(Decrease)2020 2019 2018

($inmillions,exceptpersharedata)

Netrevenue $ 15,301 $ 16,883 $ 14,950 (9)% 13%Operatingexpenses $ 7,220 $ 7,219 $ 7,668 —% (6)%

Operatingincome $ 8,081 $ 9,664 $ 7,282 (16)% 33%

Operatingmargin 52.8% 57.2% 48.7% (4.4)ppt 8.5ppt

Incometaxexpense $ 1,349 $ 1,613 $ 1,345 (16)% 20%

Effectiveincometaxrate 17.4% 16.6% 18.7% 0.8ppt (2.1)ppt

Netincome $ 6,411 $ 8,118 $ 5,859 (21)% 39%Dilutedearningspershare $ 6.37 $ 7.94 $ 5.60 (20)% 42%

Dilutedweighted-averagesharesoutstanding 1,006 1,022 1,047 (2)% (2)%

Thefollowingtableprovidesasummaryofourkeynon-GAAPoperatingresults1,adjustedtoexcludetheimpactofgainsandlossesonourequityinvestments,specialitems(whichrepresentlitigationjudgmentsandsettlementsandcertainone-timeitems)andtherelated tax impacts on our non-GAAP adjustments. In addition, we have presented growth rates, adjusted for the impact ofcurrency:

YearendedDecember31,2020

Increase/(Decrease)2019

Increase/(Decrease)

2020 2019 2018As

adjustedCurrency-neutral

Asadjusted

Currency-neutral


Netrevenue $ 15,301 $ 16,883 $ 14,950 (9)% (8)% 13% 16%

Adjustedoperatingexpenses $ 7,147 $ 7,219 $ 6,540 (1)% (1)% 10% 12%

Adjustedoperatingmargin 53.3% 57.2% 56.2% (4.0)ppt (3.7)ppt 1.0ppt 1.3ppt

Adjustedeffectiveincometaxrate 17.2% 17.0% 18.5% 0.2ppt 0.3ppt (1.5)ppt (1.3)ppt

Adjustednetincome $ 6,463 $ 7,937 $ 6,792 (19)% (17)% 17% 20%

Adjusteddilutedearningspershare $ 6.43 $ 7.77 $ 6.49 (17)% (16)% 20% 23%

Note:Tablesmaynotsumduetorounding.1 See“Non-GAAPFinancialInformation”forfurtherinformationonournon-GAAPadjustmentsandthereconciliationtoGAAPreportedamounts.



Keyhighlightsfor2020ascomparedto2019wereasfollows:

Netrevenue

GAAPNon-GAAP

(currency-neutral)Netrevenuedecreased8%onacurrency-neutralbasisduetoCOVID-19 impacts,andincludesa1percentagepointbenefit fromacquisitions. Grossdollarvolumewasflatonalocalcurrencybasis.Theprimarydriversofnetrevenuewere:down9% down8% -Cross-bordervolumedeclineof29%onalocalcurrencybasis-Rebatesandincentivesgrowthof3%,or4%onacurrency-neutralbasis

Thesedecreasestonetrevenuewerepartiallyoffsetby:-Switchedtransactionsgrowthof3%-Otherrevenuesgrowthof14%,or15%onacurrency-neutralbasis,whichincludes3percentagepointsofgrowthduetoacquisitions

Operatingexpenses

Adjustedoperatingexpenses

GAAPNon-GAAP

(currency-neutral)Adjustedoperatingexpensedecreased1%onacurrency-neutralbasis,whichincludeda 4 percentage point increase due to acquisitions. Excluding acquisitions, expensesdeclined 5 percentage points primarily due to reduced spending on advertising andmarketing, travel andprofessional fees, partially offset by higher personnel anddataprocessingcoststosupportcontinuedinvestmentinourstrategicinitiatives.

flat down1%

Effectiveincometaxrate

Adjustedeffectiveincometaxrate

GAAPNon-GAAP

(currency-neutral)Adjustedeffectiveincometaxrateof17.2%washigherthanprioryearprimarilyduetoadiscretetaxbenefitrelatedtoafavorablecourtrulingin2019.

17.4% 17.2%Other2020financialhighlightswereasfollows:• Wegeneratednetcashflowsfromoperationsof$7.2billion.

• Wecompletedtheacquisitionsofbusinessesfortotalconsiderationof$1.1billion.

• Werepurchased14.3millionsharesofourcommonstockfor$4.5billionandpaiddividendsof$1.6billion.

• Wecompleteddebtofferingsforanaggregateprincipalamountof$4.0billion.

Non-GAAPFinancialInformation

Non-GAAPfinancialinformationisdefinedasanumericalmeasureofacompany’sperformancethatexcludesorincludesamountsso as to be different than the most comparable measure calculated and presented in accordance with accounting principlesgenerally accepted in theUnitedStates (“GAAP”). Ournon-GAAP financialmeasuresexclude the impactof special items,whereapplicable,which represent litigation judgments and settlements and certain one-time items, aswell as the related tax impacts(“Special Items”). Starting in 2019, our non-GAAP financialmeasures also exclude the impact of gains and losses on our equityinvestmentswhichprimarilyincludesmark-to-marketfairvalueadjustments,impairmentsandgainsandlossesupondispositionandtherelatedtaximpacts.The2018amountswerenotrestated,astheimpactofthechangewasimmaterialinrelationtoournon-GAAPresults.Ournon-GAAPfinancialmeasuresforthecomparableperiodsexcludetheimpactofthefollowing:

GainsandLossesonEquityInvestments

• During2020and2019,werecordednetgainsof$30million($15millionaftertax,or$0.01perdilutedshare)and$167million($124millionaftertax,or$0.12perdilutedshare),respectively.Thenetgainswereprimarilyrelatedtounrealizedfairmarketvalueadjustmentsonmarketableandnon-marketableequitysecurities.



SpecialItems

Litigationprovisions

• During2020,werecordedpre-taxchargesof$73million($67millionaftertax,or$0.07perdilutedshare)relatedtolitigationprovisionswhichincludedpre-taxchargesof:

◦ $45millionrelatedtoanongoingconfidentiallegalmatterassociatedwithourprepaidcardsintheU.K.,and

◦ $28millionrelatedtoestimatedattorneys’feesandlitigationsettlementswithU.K.andPan-Europeanmerchants.

• During 2018,we recorded pre-tax charges of $1,128million ($1,008million after tax, or $0.96 per diluted share) related tolitigationprovisionswhichincludedpre-taxchargesof:

◦ $654millionrelatedtoafineissuedbytheEuropeanCommission,

◦ $237millionrelatedtoboththeU.S.merchantclasslitigationandthefiledandanticipatedopt-outU.S.merchantcases,and

◦ $237millionrelatedtolitigationsettlementswithU.K.andPan-Europeanmerchants.

Taxact

• During2019,werecordeda$57millionnettaxbenefit($0.06perdilutedshare),whichincludeda$30millionbenefitrelatedtoareductiontothe2017one-timedeemedrepatriationtaxonaccumulatedforeignearnings(the“TransitionTax”)resultingfromfinaltaxregulationsissuedin2019anda$27millionbenefitrelatedtoadditionalforeigntaxcreditswhichcanbecarriedbackundertransitionrules.

• During2018,werecordeda$75millionnettaxbenefit($0.07perdilutedshare),whichincludeda$90millionbenefitrelatedtothecarrybackofforeigntaxcreditsduetotransitionrules,offsetbyanet$15millionexpenseprimarilyrelatedtoanincreasetoourTransitionTax.

SeeNote7 (Investments),Note20 (IncomeTaxes) andNote21 (Legal andRegulatoryProceedings) to the consolidated financialstatements included in Part II, Item 8 for further discussion. We excluded these items because management evaluates theunderlyingoperationsandperformanceoftheCompanyseparatelyfromtheserecurringandnonrecurringitems.

Webelievethatthenon-GAAPfinancialmeasurespresentedfacilitateanunderstandingofouroperatingperformanceandprovideameaningfulcomparisonofourresultsbetweenperiods.Weusenon-GAAPfinancialmeasuresto,amongotherthings,evaluateourongoing operations in relation to historical results, for internal planning and forecasting purposes and in the calculation ofperformance-basedcompensation.

Inaddition,wepresentgrowthratesadjustedfortheimpactofcurrency,whichisanon-GAAPfinancialmeasure.Currency-neutralgrowth rates are calculated by remeasuring the prior period’s results using the current period’s exchange rates for both thetranslationalandtransactionalimpactsonoperatingresults.TheimpactofcurrencytranslationrepresentstheeffectoftranslatingoperatingresultswherethefunctionalcurrencyisdifferentthanourU.S.dollarreportingcurrency.Theimpactofthetransactionalcurrencyrepresentstheeffectofconvertingrevenueandexpensesoccurringinacurrencyotherthanthefunctionalcurrency.Webelieve the presentation of currency-neutral growth rates provides relevant information to facilitate an understanding of ouroperatingresults.

Net revenue, operating expenses, operatingmargin, other income (expense), effective income tax rate, net income and dilutedearnings per share adjusted for the impact of gains and losses on our equity investments, Special Items and/or the impact ofcurrency,arenon-GAAPfinancialmeasuresandshouldnotberelieduponassubstitutesformeasurescalculatedinaccordancewithGAAP.



The following tables reconcile our reported financialmeasures calculated in accordancewith GAAP to the respective non-GAAPadjustedfinancialmeasures:


Operatingexpenses

Operatingmargin

Otherincome(expense)


Netincome

Dilutedearningspershare


Reported-GAAP $ 7,220 52.8% $ (321) 17.4% $ 6,411 $ 6.37

(Gains)lossesonequityinvestments ** ** (30) (0.1)% (15) (0.01)

Litigationprovisions (73) 0.5% ** (0.1)% 67 0.07

Non-GAAP $ 7,147 53.3% $ (351) 17.2% $ 6,463 $ 6.43


Operatingexpenses

Operatingmargin



Netincome



Reported-GAAP $ 7,219 57.2% $ 67 16.6% $ 8,118 $ 7.94

(Gains)lossesonequityinvestments ** ** (167) (0.2)% (124) (0.12)

Taxact ** ** ** 0.6% (57) (0.06)

Non-GAAP $ 7,219 57.2% $ (100) 17.0% $ 7,937 $ 7.77


Operatingexpenses

Operatingmargin



Netincome



Reported-GAAP $ 7,668 48.7% $ (78) 18.7% $ 5,859 5.60

Ligitationprovisions (1,128) 7.5% ** (1.1)% 1,008 0.96

Taxact ** ** ** 0.9% (75) (0.07)

Non-GAAP $ 6,540 56.2% $ (78) 18.5% $ 6,792 $ 6.49

Note:Tablesmaynotsumduetorounding.**Notapplicable



ThefollowingtablesrepresentthereconciliationofourgrowthratesreportedunderGAAPtoournon-GAAPgrowthrates:

YearEndedDecember31,2020ascomparedtotheYearEndedDecember31,2019

Increase/(Decrease)

Netrevenue

Operatingexpenses

Operatingmargin

Effectiveincometax

rateNet

income


Reported-GAAP (9)% —% (4.4)ppt 0.8ppt (21)% (20)%

(Gains)lossesonequityinvestments ** ** ** —ppt 1% 1%

Litigationprovisions ** (1)% 0.5ppt (0.1)ppt 1% 1%

Taxact ** ** ** (0.6)ppt 1% 1%

Non-GAAP (9)% (1)% (4.0)ppt 0.2ppt (19)% (17)%

Currencyimpact2 1% —% 0.3ppt 0.2ppt 1% 1%

Non-GAAP-currency-neutral (8)% (1)% (3.7)ppt 0.3ppt (17)% (16)%

YearEndedDecember31,2019ascomparedtotheYearEndedDecember31,2018

Increase/(Decrease)

Netrevenue

Operatingexpenses

Operatingmargin

Effectiveincometax

rateNet

income


Reported-GAAP 13% (6)% 8.5ppt (2.1)ppt 39% 42%

(Gains)lossesonequityinvestments1 ** ** ** (0.2)ppt (2)% (2)%

Taxact ** ** ** (0.3)ppt 1% 1%

Litigationprovisions ** 16% (7.5)ppt 1.1ppt (20)% (21)%

Non-GAAP 13% 10% 1.0ppt (1.5)ppt 17% 20%

Currencyimpact2 3% 2% 0.3ppt 0.2ppt 3% 3%

Non-GAAP-currency-neutral 16% 12% 1.3ppt (1.3)ppt 20% 23%

Note:Tablesmaynotsumduetorounding.**Notapplicable1 In2019weupdatedournon-GAAPmethodologytoprospectivelyexcludetheimpactofgainsandlossesonourequityinvestments.The2018

periodwasnotrestatedastheimpactofthechangewasimmaterialinrelationtoournon-GAAPresults.2 Representsthetranslationalandtransactionalimpactofcurrency.

KeyMetrics

Inadditiontothefinancialmeasuresdescribedabovein“FinancialResultsOverview”,wereviewthefollowingmetricstoevaluateand identify trends in our business,measure our performance, prepare financial projections andmake strategic decisions. Webelieve that the key metrics presented facilitate an understanding of our operating and financial performance and provide ameaningfulcomparisonofourresultsbetweenperiods.

GrossDollarVolume(“GDV”)1measuresdollarvolumeofactivityoncardscarryingourbrandsduringtheperiod,onalocalcurrencybasis and U.S. dollar-converted basis. Dollar volume represents purchase volume plus cash volume and includes the impact ofbalance transfers and convenience checks; “purchase volume” means the aggregate dollar amount of purchases made withMastercard-brandedcards for therelevantperiod;and“cashvolume”meanstheaggregatedollaramountofcashdisbursementsand includes the impact of balance transfers and convenience checks obtainedwithMastercard-branded cards for the relevantperiod.InformationdenominatedinU.S.dollarsrelatingtoGDViscalculatedbyapplyinganestablishedU.S.dollar/localcurrencyexchangerateforeachlocalcurrencyinwhichMastercardvolumesarereported.Theseexchangeratesarecalculatedonaquarterlybasisusingtheaverageexchangerateforeachquarter.Mastercardreportsperiod-over-periodratesofchangeinpurchasevolumeandcashvolumeonthebasisoflocalcurrencyinformation,inordertoeliminatetheimpactofchangesinthevalueofcurrenciesagainsttheU.S.dollarincalculatingsuchratesofchange.

Cross-borderVolume2measures cross-border dollar volume initiated and switched throughour networkduring theperiod, on alocalcurrencybasisandU.S.dollar-convertedbasis,forallMastercard-brandedprograms.



Switched Transactions2measures the number of transactions switched byMastercard. We define transactions switched as thenumberoftransactionsinitiatedandswitchedthroughournetworkduringtheperiod.

OperatingMarginmeasureshowmuchprofitwemakeoneachdollarofsalesafterouroperatingcostsbutbeforeother income(expense)andincometaxexpense.Operatingmarginiscalculatedbydividingouroperatingincomebynetrevenue.

1 DatausedinthecalculationofGDVisprovidedbyMastercardcustomersandissubjecttoverificationbyMastercardandpartialcross-checkingagainst informationprovidedbyMastercard’stransactionswitchingsystems. Alldata issubjecttorevisionandamendmentbyMastercardorMastercard’scustomers.

2 Normalizedtoeliminatetheeffectsofdifferingswitchingandcarryoverdaysbetweenperiods.Carryoverdaysarethosewheretransactionsandvolumesfromdayswherethecompanydoesnotclearandsettleareprocessed.

ForeignCurrency

CurrencyImpact

Our primary revenue functional currencies are theU.S. dollar, euro, Brazilian real and the British pound. Our overall operatingresults are impacted by currency translation, which represents the effect of translating operating results where the functionalcurrencyisdifferentthanourU.S.dollarreportingcurrency.

Ouroperatingresultsarealsoimpactedbytransactionalcurrency.Theimpactofthetransactionalcurrencyrepresentstheeffectofconverting revenue and expense transactions occurring in a currency other than the functional currency. Changes in currencyexchangeratesdirectlyimpactthecalculationofgrossdollarvolume(“GDV”)andgrosseurovolume(“GEV”),whichareusedinthecalculationofourdomesticassessments,cross-bordervolumefeesandcertainvolume-relatedrebatesandincentives.Inmostnon-Europeanregions,GDViscalculatedbasedonlocalcurrencyspendingvolumeconvertedtoU.S.dollarsusingaverageexchangeratesfortheperiod. InEurope,GEViscalculatedbasedonlocalcurrencyspendingvolumeconvertedtoeurosusingaverageexchangerates for theperiod. Asaresult,certainofourdomesticassessments,cross-bordervolumefeesandvolume-relatedrebatesandincentives are impacted by the strengthening or weakening of the U.S. dollar versus non-European local currencies and thestrengtheningorweakeningoftheeuroversusotherEuropeanlocalcurrencies. Forexample,ourbillinginAustraliais intheU.S.dollar,however,consumerspendinAustraliaisintheAustraliandollar.ThecurrencytransactionalimpactofconvertingAustraliandollarstoourU.S.dollarbillingcurrencywillhaveanimpactontherevenuegenerated.ThestrengtheningorweakeningoftheU.S.dollarisevidentwhenGDVgrowthonaU.S.dollar-convertedbasisiscomparedtoGDVgrowthonalocalcurrencybasis.In2020,GDVonaU.S.dollar-convertedbasisdecreased2.0%,whileGDVonalocalcurrencybasisincreased0.1%versus2019.In2019,GDVon aU.S. dollar-convertedbasis increased9.8%,whileGDVon a local currencybasis increased13.1%versus2018. Further, theimpactfromtransactionalcurrencyoccursintransactionprocessingrevenue,otherrevenueandoperatingexpenseswhenthelocalcurrencyoftheseitemsisdifferentthanthefunctionalcurrencyoftheentity.

Thetranslationalandtransactional impactofcurrency(“Currencyimpact”)hasbeenidentifiedinourdriversofchangetablesandhas been excluded from our currency-neutral growth rates, which are non-GAAP financial measures. See “Financial Results -Revenue and Operating Expenses” for our drivers of change impact tables and “Non-GAAP Financial Information” for furtherinformationonournon-GAAPadjustments.

2021HedgeAccountingDesignation

Through December 31, 2020, our approach to manage our transactional currency exposure consisted of hedging a portion ofanticipatedrevenuesimpactedbytransactionalcurrenciesbyenteringintoforeignexchangederivativecontracts,andrecordingtherelated changes in fair value in general and administrative expenses on the consolidated statement of operations. Beginning inJanuary 2021, we started to formally designate certain newly-executed foreign exchange derivative contracts, which meet theestablishedaccountingcriteria,ascashflowhedges.Startinginthefirstquarterof2021,gainsandlossesresultingfromchangesinfair value of these designated contracts will be deferred in accumulated other comprehensive income (loss) and subsequentlyrecognizedintherespectivecomponentofnetrevenuewhentheunderlyingforecastedtransactionsimpactearnings.Therelatedimpactofourforeignexchangecashflowhedgingactivitieswillbeexcludedfromourcurrency-neutralgrowthratesaspartofourCurrencyimpact.

ForeignExchangeActivity

Weincurforeigncurrencygainsandlossesfromremeasuringmonetaryassetsandliabilities, includingsettlementreceivablesandpayableswithourcustomers,thataredenominatedinacurrencyotherthanthefunctionalcurrencyoftheentity.Tomanagethisforeignexchangerisk,wemayenterintoforeignexchangederivativecontractstoeconomicallyhedgetheforeigncurrencyexposureofaportionofournonfunctionalmonetaryassetsandliabilities. Thegainsor lossesresultingfromchanges infairvalueofthesecontractsareintendedtoreducethepotentialeffectoftheunderlyinghedgedexposureandarerecordednetwithingeneraland



administrativeexpensesontheconsolidatedstatementofoperations.Theimpactofforeignexchangeactivity,includingtherelatedhedgingactivities,hasnotbeeneliminatedinourcurrency-neutralresults.

Our foreign exchange risk management activities are discussed further in Note 23 (Derivative and Hedging Instruments) to theconsolidatedfinancialstatementsincludedinPartII,Item8.

RiskofCurrencyDevaluation

We are exposed to currency devaluation in certain countries. In addition, we are subject to exchange control regulations thatrestricttheconversionoffinancialassetsintoU.S.dollars.Whiletheserevenuesandassetsarenotmaterialtousonaconsolidatedbasis,wecanbenegativelyimpactedshouldtherebeacontinuedandsustaineddevaluationoflocalcurrenciesrelativetotheU.S.dollarand/oracontinuedandsustaineddeteriorationofeconomicconditionsinthesecountries.

FinancialResults

Revenue

Primarydriversofnetrevenue,versustheprioryear,wereasfollows:

Grossrevenuedecreased5%,or4%onacurrency-neutralbasis,drivenbydecreasedcross-bordervolumesreflectingimpactsoftheCOVID-19outbreak,partiallyoffsetbyincreasesinourvalue-addedproductsandservicesandthenumberofswitchedtransactions.Grossdollarvolumeof$6.3trillionwasflat.

Rebates and incentives increased 3%, or 4% on a currency-neutral basis, due to new and renewed deals partially offset by afavorablemixofvolume-basedincentives.

Netrevenuedecreased9%,or8%onacurrency-neutralbasis,including1percentagepointofgrowthfromouracquisitions.

SeeNote3(Revenue)totheconsolidatedfinancialstatementsincludedinPartII,Item8forafurtherdiscussionofhowwerecognizerevenue.

Thecomponentsofnetrevenuewereasfollows:

FortheYearsEndedDecember31, Increase(Decrease)

2020 2019 2018 2020 2019

($inmillions)

Domesticassessments $ 6,656 $ 6,781 $ 6,138 (2)% 10%

Cross-bordervolumefees 3,512 5,606 4,954 (37)% 13%

Transactionprocessing 8,731 8,469 7,391 3% 15%

Otherrevenues 4,717 4,124 3,348 14% 23%

Grossrevenue 23,616 24,980 21,831 (5)% 14%

Rebatesandincentives(contra-revenue) (8,315) (8,097) (6,881) 3% 18%

Netrevenue $ 15,301 $ 16,883 $ 14,950 (9)% 13%



Thefollowingtablesummarizesthedriversofchangeinnetrevenue:


Volume AcquisitionsCurrencyImpact1 Other2 Total

2020 2019 2020 2019 2020 2019 2020 2019 2020 2019

Domesticassessments —% 13% —% —% (3)% (3)% 1% 3 1% 3 (2)% 10%

Cross-bordervolumefees (30)% 14% —% —% —% (3)% (7)% 2% (37)% 13%

Transactionprocessing 3% 14% —% —% —% (2)% —% 3% 3% 15%

Otherrevenues ** ** 3% 2% (1)% (1)% 12% 4 22% 4 14% 23%

Rebatesandincentives (6)% 5 9% 5 —% —% (2)% (3)% 10% 6 11% 6 3% 18%

Netrevenue (5)% 13% 1% 1% (1)% (3)% (4)% 2% (9)% 13%

Note:Tablemaynotsumduetorounding**Notapplicable1 Representsthetranslationalandtransactionalimpactofcurrency.2 Includesimpactfrompricing,othernon-volumebasedfeesandgeographicmix.3 Includesimpactoftheallocationofrevenuetoservicedeliverables,whichareprimarilyrecordedinotherrevenuewhenservicesareperformed.4 Includesimpactsfromcyberandintelligencefees,dataanalyticsandconsultingfeesandotherpayment-relatedproductsandservices.5 Includestheimpactfrommixonvolume-basedincentives.6 Includestheimpactofnew,renewedandexpiredagreements.

Thefollowingtablesprovideasummaryofthetrendinvolumesandtransactions.


2020 2019

Increase/(Decrease)

USD Local USD Local

Mastercard-brandedGDV1 (2)% —% 10% 13%

AsiaPacific/MiddleEast/Africa (3)% (2)% 8% 12%

Canada (4)% (3)% 4% 7%

Europe (2)% 1% 12% 18%

LatinAmerica (17)% (2)% 9% 15%

UnitedStates 2% 2% 10% 10%

Cross-bordervolume1 (29)% 16%

1 ExcludesvolumegeneratedbyMaestroandCirruscards.


Increase/(Decrease)

2020 2019

Switchedtransactions 3% 19%

No individual country, other than theUnited States, generatedmore than10%of net revenue in any suchperiod. A significantportionofournetrevenueisconcentratedamongourfivelargestcustomers.In2020,thenetrevenuefromthesecustomerswasapproximately$3.4billion,or22%,oftotalnetrevenue.Thelossofanyofthesecustomersortheirsignificantcardprogramscouldadverselyimpactourrevenue.

OperatingExpenses

Operatingexpenseswereflatin2020versustheprioryear.Adjustedoperatingexpensesdecreased1%onbothanasadjustedandacurrency-neutral basis versus the prior year. Current year results include growth of approximately 4 percentage points fromacquisitions.Excludingacquisitions,expensesdeclined5%primarilyduetoreducedspendingonadvertisingandmarketing,travelandprofessionalfees,partiallyoffsetbyhigherpersonnelanddataprocessingcoststosupportcontinuedinvestmentinourstrategicinitiatives.



Thecomponentsofoperatingexpenseswereasfollows:


2020 2019 2018 2020 2019

($inmillions)

Generalandadministrative $ 5,910 $ 5,763 $ 5,174 3% 11%

Advertisingandmarketing 657 934 907 (30)% 3%

Depreciationandamortization 580 522 459 11% 14%

Provisionforlitigation 73 — 1,128 ** **

Totaloperatingexpenses 7,220 7,219 7,668 —% (6)%

SpecialItems1 (73) — (1,128) ** **

Adjustedoperatingexpenses(excludingSpecialItems1) $ 7,147 $ 7,219 $ 6,540 (1)% 10%

Note:Tablemaynotsumduetorounding.**Notmeaningful1 See“Non-GAAPFinancialInformation”forfurtherinformationonournon-GAAPadjustmentsandthereconciliationtoGAAPreportedamounts.

Thefollowingtablesummarizesthedriversofchangesinoperatingexpenses:


OperationalSpecialItems1 Acquisitions

CurrencyImpact2 Total

2020 2019 2020 2019 2020 2019 2020 2019 2020 2019

Generalandadministrative (1)% 11% ** ** 4% 2% —% (2)% 3% 11%

Advertisingandmarketing (30)% 5% ** ** —% —% (1)% (2)% (30)% 3%

Depreciationandamortization 5% 9% ** ** 6% 7% —% (2)% 11% 14%

Provisionforlitigation ** ** ** ** ** ** ** ** ** **

Totaloperatingexpenses (5)% 10% 1% (16)% 4% 2% —% (2)% —% (6)%

Note:Tablemaynotsumduetorounding.**Notmeaningful1 See“Non-GAAPFinancialInformation”forfurtherinformationonournon-GAAPadjustmentsandthereconciliationtoGAAPreportedamounts.2 Representsthetranslationalandtransactionalimpactofcurrency.

GeneralandAdministrative

Generalandadministrativeexpensesincreased3%onbothanasreportedandacurrency-neutralbasisin2020versustheprioryear.Current year results include growth of approximately 4 percentage points from acquisitions. Excluding acquisitions, expensesdeclined1%primarilyduetoreducedspendingontravelandprofessionalfees,partiallyoffsetbyanincreaseinpersonnelanddataprocessingcoststosupportcontinuedinvestmentinourstrategicinitiatives.



Thecomponentsofgeneralandadministrativeexpenseswereasfollows:


2020 2019 2018 2020 2019

($inmillions)

Personnel $ 3,787 $ 3,537 $ 3,214 7% 10%

Professionalfees 384 447 377 (14)% 19%

Dataprocessingandtelecommunications 756 666 600 14% 11%

Foreignexchangeactivity1 9 32 (36) ** **

Other 974 1,081 1,019 (10)% 6%

Totalgeneralandadministrativeexpenses 5,910 5,763 5,174 3% 11%

Note:Tablemaynotsumduetorounding.**Notmeaningful1 Foreignexchangeactivity includesgainsand losseson foreignexchangederivativecontractsand the impactof remeasurementofassetsand

liabilities denominated in foreign currencies. See Note 23 (Derivative and Hedging Instruments) to the consolidated financial statementsincludedinPartII,Item8forfurtherdiscussion.

AdvertisingandMarketing

Advertisingandmarketingexpensesdecreased30%,or29%onacurrency-neutralbasisin2020versustheprioryear,primarilyduetoloweradvertisingandsponsorshipspendinresponsetoCOVID-19.

DepreciationandAmortization

Depreciationandamortizationexpensesincreased11%onbothanasreportedandacurrency-neutralbasisin2020versustheprioryear. Current year results include growth of approximately 6 percentage points from acquisitions. The remaining increase wasprimarilyduetohigherdepreciationfromcapitalinvestments.

ProvisionforLitigation

In2020,werecorded$73millionrelatedtovarious litigationsettlementsandlegalcosts. Therewereno litigationcharges intheprioryear.SeeNote21(LegalandRegulatoryProceedings)totheconsolidatedfinancialstatementsincludedinPartII, Item8forfurtherdiscussion.

OtherIncome(Expense)

Other income(expense)wasunfavorable in2020versustheprioryearprimarilydueto increased interestexpenserelatedtoourrecentdebt issuances,aswellas lowernetgains in thecurrentyearversustheprioryearrelatedtounrealized fairmarketvalueadjustmentsonmarketableandnon-marketableequitysecuritiesandadecreaseinourinvestmentincome.

Thecomponentsofotherincome(expense)wereasfollows:


2020 2019 2018 2020 2019

($inmillions)

InvestmentIncome $ 24 $ 97 $ 122 (75)% (21)%

Gains(losses)onequityinvestments,net 30 167 — (82)% **

Interestexpense (380) (224) (186) 70% 20%

Otherincome(expense),net 5 27 (14) (81)% **

Totalotherincome(expense) (321) 67 (78) ** **

Note:Tablemaynotsumduetorounding.**Notmeaningful

IncomeTaxes

TheeffectiveincometaxratesfortheyearsendedDecember31,2020and2019were17.4%and16.6%,respectively.Theeffectiveincometaxratefor2020washigherthantheprioryear,primarilyduetodiscretetaxbenefits in2019,partiallyoffsetbyamore



favorablegeographicmixofearningsin2020.The2019discretetaxbenefitsrelatedtoafavorablecourtruling,areductiontotheCompany’stransitiontaxliabilityandadditionalforeigntaxcreditswhichcanbecarriedbackunderU.StaxreformtransitionrulesissuedbytheDepartmentoftheTreasuryandtheInternalRevenueService.

TheadjustedeffectiveincometaxratesfortheyearsendedDecember31,2020and2019were17.2%and17.0%,respectively.Theadjustedeffectiveincometaxratewashigherthantheprioryear,primarilyduetoadiscretetaxbenefitrelatedtoafavorablecourtrulingin2019.

SeeNote20(IncomeTaxes)totheconsolidatedfinancialstatementsincludedinPartII,Item8forfurtherdiscussion.

LiquidityandCapitalResourcesWe rely on existing liquidity, cash generated from operations and access to capital to fund our global operations, credit andsettlementexposure,capitalexpenditures, investmentsinourbusinessandcurrentandpotentialobligations. Thefollowingtablesummarizesthecash,cashequivalents,investmentsandcreditavailabletousatDecember31:

2020 2019

(inbillions)

Cash,cashequivalentsandinvestments1 $ 10.6 $ 7.7

Unusedlineofcredit 6.0 6.01 Investments include available-for-sale securities and held-to-maturity securities. This amount excludes restricted cash and restricted cash

equivalentsof$2.3billionand$2.0billionatDecember31,2020and2019,respectively.

Webelievethatourexistingcash,cashequivalentsandinvestmentsecuritiesbalances,ourcashflowgeneratingcapabilities,andouraccess to capital resources are sufficient to satisfy our future operating cash needs, capital asset purchases, outstandingcommitmentsandotherliquidityrequirementsassociatedwithourexistingoperationsandpotentialobligations.

Ourliquidityandaccesstocapitalcouldbenegativelyimpactedbyglobalcreditmarketconditions.Weguaranteethesettlementofmany of the transactions between our customers. Historically, payments under these guarantees have not been significant;however,historical trendsmaynotbean indicationofpotential future losses. The riskof losson theseguarantees is specific toindividualcustomers,butmayalsobedrivenbyregionalorglobaleconomicconditions,including,butnotlimitedtothehealthofthefinancialinstitutionsinacountryorregion.SeeNote22(SettlementandOtherRiskManagement)totheconsolidatedfinancialstatementsinPartII,Item8foradescriptionoftheseguarantees.

Ourliquidityandaccesstocapitalcouldalsobenegativelyimpactedbytheoutcomeofanyofthelegalorregulatoryproceedingstowhichweareaparty.Foradditionaldiscussionoftheseandotherrisksfacingourbusiness,seePartI,Item1A-RiskFactors-LegalandRegulatoryRisksandNote21 (LegalandRegulatoryProceedings) to theconsolidatedfinancialstatements included inPart II,Item8.

CashFlow

Thetablebelowshowsasummaryofthecashflowsfromoperating,investingandfinancingactivities:


2020 2019 2018

(inmillions)

Netcashprovidedbyoperatingactivities $ 7,224 $ 8,183 $ 6,223

Netcashusedininvestingactivities (1,879) (1,640) (506)

Netcashusedinfinancingactivities (2,152) (5,867) (4,966)

Netcashprovidedbyoperatingactivitiesdecreased$1.0billion in2020versus theprioryear,primarilydue to lowernet incomeadjustedfornon-cashitems,partiallyoffsetbyadecreaseinlitigationpayments.

Netcashusedininvestingactivitiesincreased$239millionin2020versustheprioryear,primarilyduetolowernetproceedsfromourinvestmentsinavailable-for-saleandheld-to-maturitysecurities,partiallyoffsetbyhigherprioryearacquisitionpayments.

Netcashusedinfinancingactivitiesdecreased$3.7billionin2020versustheprioryear,primarilyduetolowerrepurchasesofourClassAcommonstock,highernetdebtproceedsinthecurrentperiodandtherepaymentofdebtthatmaturedintheprioryear.



DebtandCreditAvailability

InMarch2020,weissued$1billionprincipalamountofnotesdueMarch2027,$1.5billionprincipalamountofnotesdueMarch2030and$1.5billionprincipalamountnotesdueMarch2050.Ourtotaldebtoutstandingwas$12.7billionatDecember31,2020,withtheearliestmaturityof$650millionofprincipaloccurringinNovember2021.

AsofDecember31,2020,wehaveacommercialpaperprogram(the“CommercialPaperProgram”),underwhichweareauthorizedto issueupto$6billion inoutstandingnotes,withmaturitiesupto397days fromthedateof issuance. Inconjunctionwith theCommercialPaperProgram,wehaveacommittedunsecured$6billionrevolvingcreditfacility(the“CreditFacility”)which,in2020,wasextendedforanadditionalyearandnowexpiresinNovember2025.

Borrowingsunder theCommercial PaperProgramand theCredit Facility are toprovide liquidity for general corporatepurposes,includingproviding liquidity in theeventofoneormore settlement failuresbyour customers. In addition,wemayborrowandrepayamountsunderthesefacilitiesforbusinesscontinuitypurposes. WehadnoborrowingsoutstandingundertheCommercialPaperProgramortheCreditFacilityatDecember31,2020.

See Note 15 (Debt) to the consolidated financial statements included in Part II, Item 8 for further discussion on our debt, theCommercialPaperProgramandtheCreditFacility.

DividendsandShareRepurchases

Wehave historically paid quarterly dividends on our outstanding Class A common stock and Class B common stock. Subject tolegallyavailablefunds,weintendtocontinuetopayaquarterlycashdividend.ThedeclarationandpaymentoffuturedividendsisatthesolediscretionofourBoardofDirectorsafter taking intoaccountvarious factors, includingour financial condition,operatingresults,availablecashandcurrentandanticipatedcashneeds.

Thefollowingtablesummarizestheannual,persharedividendspaidintheyearsreflected:


2020 2019 2018

(inmillions,exceptpersharedata)

Cashdividend,pershare $ 1.60 $ 1.32 $ 1.00

Cashdividendspaid $ 1,605 $ 1,345 $ 1,044

OnDecember8,2020,ourBoardofDirectorsdeclaredaquarterlycashdividendof$0.44per sharepaidonFebruary9,2021 toholders of record on January 8, 2021 of our Class A common stock and Class B common stock. The aggregate amount of thisdividendwas$439million.

OnFebruary8,2021,ourBoardofDirectorsdeclaredaquarterlycashdividendof$0.44persharepayableonMay7,2021toholdersof record on April 9, 2021 of our Class A common stock and Class B common stock. The aggregate amount of this dividend isestimatedtobe$437million.

Repurchasedsharesofourcommonstockareconsideredtreasurystock.InDecember2020,2019and2018,ourBoardofDirectorsapprovedsharerepurchaseprogramsauthorizingustorepurchaseupto$6.0billion,$8.0billionand$6.5billion,respectively,ofourClassA commonstock. Theprogramapproved in2020will becomeeffectiveafter completionof the share repurchaseprogramauthorized in2019. Thetimingandactualnumberofadditionalsharesrepurchasedwilldependonavarietyoffactors, includingcashrequirementstomeettheoperatingneedsofthebusiness, legalrequirements,aswellasthesharepriceandeconomicandmarket conditions. The following table summarizes our share repurchase activity of our Class A common stock throughDecember31,2020,undertheplansapprovedin2019and2018:


RemainingauthorizationatDecember31,2019 $ 8,304

Dollar-valueofsharesrepurchasedin2020 $ 4,473

RemainingauthorizationatDecember31,2020 $ 9,831

Sharesrepurchasedin2020 14.3

Averagepricepaidpersharein2020 $ 312.68

SeeNote16(Stockholders'Equity)totheconsolidatedfinancialstatementsincludedinPartII,Item8forfurtherdiscussion.



CriticalAccountingEstimatesTheapplicationofGAAPrequiresustomakeestimatesandassumptionsaboutcertainitemsandfutureeventsthatdirectlyaffectourreportedfinancialcondition.Oursignificantaccountingpolicies,includingrecentaccountingpronouncements,aredescribedinNote1(SummaryofSignificantAccountingPolicies)totheconsolidatedfinancialstatementsincludedinPartII,Item8.

RevenueRecognition-RebatesandIncentives

Weenterintobusinessagreementswithcertaincustomersthatprovideforrebatesorsupportwhencustomersmeetcertainvolumethresholdsaswellasothersupportincentives,whicharetiedtocustomerperformance.Weconsidervariousfactorsinestimatingcustomer performance, including forecasted transactions, card issuance and card conversion volumes, expected payments andhistorical experiencewith that customer. Rebates and incentives are recorded as a reduction to gross revenue based on theseestimatesprimarilywhenvolume-andtransaction-basedrevenuesarerecognizedoverthecontractualterm.Differencesbetweenactual results and our estimates are adjusted in the period the customer reports actual performance. If our customers’ actualperformanceisnotconsistentwithourestimatesoftheirperformance,netrevenuemaybemateriallydifferent.

LossContingencies

Wearecurrently involved invariousclaimsand legalproceedings. Weregularly reviewthestatusofeachsignificantmatterandassess its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and theamount can be reasonably estimated, we accrue a liability for the estimated loss. Significant judgment is required in both thedeterminationofprobabilityandwhetheranexposureisreasonablyestimable.Ourjudgmentsaresubjectivebasedonthestatusofthelegalorregulatoryproceedings,themeritsofourdefensesandconsultationwithin-houseandoutsidelegalcounsel.Becauseofuncertainties related to these matters, accruals are based only on the best information available at the time. As additionalinformation becomes available, we reassess the potential liability related to pending claims and litigation and may revise ourestimates.Duetotheinherentuncertaintiesofthelegalandregulatoryprocessinthemultiplejurisdictionsinwhichweoperate,ourjudgmentsmaybemateriallydifferentthantheactualoutcomes.

IncomeTaxes

Incalculatingoureffectiveincometaxrate,estimatesarerequiredregardingthetimingandamountoftaxableanddeductibleitemswhich will adjust the pretax income earned in various tax jurisdictions. Through our interpretation of local tax regulations,adjustments topretax incomefor incomeearned invarious tax jurisdictionsare reflectedwithinvarious tax filings. Althoughwebelieve that our estimates and judgments discussed herein are reasonable, actual results may be materially different than theestimatedamounts.

We record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized.Significant judgment is required in determining the valuation allowance. In assessing the need for a valuation allowance, weconsider all sources of taxable income including, projected future taxable income, reversing taxable temporary differences andongoingtaxplanningstrategies.Ifitisdeterminedthatweareabletorealizedeferredtaxassetsinexcessofthenetcarryingvalueortotheextentweareunabletorealizeadeferredtaxasset,wewouldadjustthevaluationallowanceintheperiodinwhichsuchadeterminationismade,withacorrespondingincreaseordecreasetoearnings.

We record tax liabilities for uncertain taxpositions taken, or expected tobe taken,whichmaynotbe sustainedormayonlybepartiallysustained,uponexaminationbytherelevanttaxingauthorities.Weconsiderallrelevantfactsandcurrentauthoritiesinthetaxlawinassessingwhetheranybenefitresultingfromanuncertaintaxpositionismorelikelythannottobesustainedand,ifso,how current law impacts the amount reflectedwithin these financial statements. If upon examination,we realize a tax benefitwhich is not fully sustained or is more favorably sustained, this would decrease or increase earnings in the period. In certainsituations,wewillhaveoffsettingtaxcreditsortaxesinotherjurisdictions.

Deferred taxes are established on the estimated foreign exchange gains or losses for foreign earnings that are not consideredpermanentlyreinvested,whichwillberecognizedthroughcumulativetranslationadjustmentsasincurred.Ultimately,theworkingcapitalrequirementsofforeignaffiliateswilldeterminetheamountofcashtoberemittedfromrespectivejurisdictions.

BusinessCombinations

Weaccount forourbusinesscombinationsusing theacquisitionmethodofaccounting. Theacquisitionpurchaseprice, includingcontingentconsideration, isallocatedtotheunderlying identified, tangibleand intangibleassets, liabilitiesassumedandanynon-controllinginterestintheacquiree,basedontheirrespectiveestimatedfairvaluesontheacquisitiondate.Anyexcessofpurchasepriceoverthefairvalueofnetassetsacquired, including identifiable intangibleassets, isrecordedasgoodwill. Theamountsanduseful lives assigned to acquisition-related tangible and intangible assets impact the amount and timing of future amortization



expense.Weusevariousvaluationtechniquestodeterminefairvalue,primarilydiscountedcashflowsanalysis,relief-from-royaltyandmulti-period excess earnings for estimating the value of intangible assets. These valuation techniques included comparablecompanymultiples,discountrates,growthprojectionsandotherassumptionsoffuturebusinessconditions. Determiningthefairvalue of assets acquired, liabilities assumed, any non-controlling interest in the acquiree and the expected useful lives, requiresmanagement’sjudgment.Thesignificanceofmanagement’sestimatesandassumptionsisrelativetothesizeoftheacquisition.Ourestimatesarebaseduponassumptionsbelievedtobereasonable,butwhichareinherentlyuncertainandunpredictable.

Item 7A. Quantitative and qualitative disclosures about marketriskMarketriskisthepotentialforeconomiclossestobeincurredonmarketrisksensitiveinstrumentsarisingfromadversechangesinfactorssuchasinterestratesandforeigncurrencyexchangerates.Ourexposuretomarketriskfromchangesininterestratesandforeign exchange rates is limited. Managementmonitors risk exposures on an ongoing basis and establishes and oversees theimplementationofpoliciesgoverningourfunding,investmentsanduseofderivativefinancialinstrumentstomanagetheserisks.

Foreigncurrencyandinterestrateexposuresaremanagedthroughourriskmanagementactivities,whicharediscussedfurtherinNote23(DerivativeandHedgingInstruments)totheconsolidatedfinancialstatementsincludedinPartII,Item8.

ForeignExchangeRiskWe enter into foreign exchange derivative contracts to manage currency exposure associated with anticipated receipts anddisbursementsoccurring inacurrencyother thanthe functionalcurrencyof theentity. Wemayalsoenter into foreigncurrencyderivativecontractstooffsetpossiblechangesinvalueofassetsandliabilitiesduetoforeignexchangefluctuations.Theobjectiveoftheseactivitiesistoreduceourexposuretotransactiongainsandlossesresultingfromfluctuationsofforeigncurrenciesagainstourfunctionaland reportingcurrencies,principally theU.S.dollarandeuro. Theeffectofahypothetical10%adversechange in thevalue of the functional currencies could result in a fair value loss of approximately $58million and $144million on our foreignexchangederivativecontractsoutstandingatDecember31,2020and2019,respectively,beforeconsideringtheoffsettingeffectoftheunderlyinghedgedactivity.

Weare also subject to foreign exchange risk as part of our daily settlement activities. Tomanage this risk,weenter into shortdurationforeignexchangecontractsbaseduponanticipatedreceiptsanddisbursementsfortherespectivecurrencyposition.Thisrisk is typically limited to a fewdaysbetweenwhenapayment transaction takesplaceand the subsequent settlementwithourcustomers.Theeffectofahypothetical10%adversechangeinthevalueofthefunctionalcurrenciescouldresultinafairvaluelossofapproximately$23milliononourshortdurationforeignexchangederivativecontractsoutstandingatDecember31,2020.TheCompanydidnothaveanyoutstandingshortdurationforeignexchangederivativecontractsrelatedtothisactivityatDecember31,2019.

InterestRateRiskOuravailable-for-saledebtinvestmentsincludefixedandvariableratesecuritiesthataresensitivetointerestratefluctuations.Ourpolicy is to invest inhighquality securities,whileprovidingadequate liquidity andmaintainingdiversification toavoid significantexposure.Ahypothetical100basispointadversechangeininterestrateswouldnothaveamaterialimpacttothefairvalueofourinvestmentsatDecember31,2020and2019.



Item8.Financialstatementsandsupplementarydata

MastercardIncorporatedIndextoconsolidatedfinancialstatements

Page

AsofDecember31,2020and2019andfortheyearsendedDecember31,2020,2019and2018

Management’sreportoninternalcontroloverfinancialreporting 57

Reportofindependentregisteredpublicaccountingfirm 58

ConsolidatedStatementofOperations 60

ConsolidatedStatementofComprehensiveIncome 61

ConsolidatedBalanceSheet 62

ConsolidatedStatementofChangesinEquity 63

ConsolidatedStatementofCashFlows 65

Notestoconsolidatedfinancialstatements 66

PARTIIITEM8.FINANCIALSTATEMENTSANDSUPPLEMENTARYDATA


Management’sreportoninternalcontroloverfinancialreportingThe management of Mastercard Incorporated (“Mastercard”) is responsible for establishing and maintaining adequate internalcontrol over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes inaccordance with accounting principles generally accepted in the United States of America. Because of its inherent limitations,internalcontroloverfinancialreportingmaynotpreventordetectmisstatements.AsrequiredbySection404oftheSarbanes-OxleyActof2002,managementhasassessedtheeffectivenessofMastercard’sinternalcontroloverfinancialreportingasofDecember31,2020. Inmaking itsassessment,managementhasutilizedthecriteriasetforth in InternalControl - IntegratedFramework(2013)issuedbytheCommitteeofSponsoringOrganizationsoftheTreadwayCommission(COSO).Managementhasconcludedthat,basedonitsassessment,Mastercard’sinternalcontroloverfinancialreportingwaseffectiveasofDecember31,2020.TheeffectivenessofMastercard’sinternalcontroloverfinancialreportingasofDecember31,2020hasbeenauditedbyPricewaterhouseCoopersLLP,anindependentregisteredpublicaccountingfirm,asstatedintheirreportwhichappearsonthenextpage.



ReportofIndependentRegisteredPublicAccountingFirmTotheBoardofDirectorsandStockholdersofMastercardIncorporated

OpinionsontheFinancialStatementsandInternalControloverFinancialReporting

WehaveauditedtheaccompanyingconsolidatedbalancesheetsofMastercardIncorporatedanditssubsidiaries(the“Company”)asofDecember31,2020and2019andtherelatedconsolidatedstatementsofoperations,comprehensiveincome,changesinequityandcashflowsforeachofthethreeyearsintheperiodendedDecember31,2020,includingtherelatednotes(collectivelyreferredtoasthe“consolidatedfinancialstatements”).WealsohaveauditedtheCompany’sinternalcontroloverfinancialreportingasofDecember31, 2020,basedon criteriaestablished in InternalControl - IntegratedFramework (2013) issuedby theCommitteeofSponsoringOrganizationsoftheTreadwayCommission(COSO).

Inouropinion,theconsolidatedfinancialstatementsreferredtoabovepresentfairly,inallmaterialrespects,thefinancialpositionoftheCompanyasofDecember31,2020and2019,andtheresultsofitsoperationsanditscashflowsforeachofthethreeyearsintheperiodendedDecember31,2020inconformitywithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica.Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as ofDecember31,2020,basedoncriteriaestablishedinInternalControl-IntegratedFramework(2013)issuedbytheCOSO.

BasisforOpinions

TheCompany’smanagement is responsible for these consolidated financial statements, formaintainingeffective internal controlover financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in theaccompanyingManagement’sReporton internalcontrolover financial reporting. Ourresponsibility is toexpressopinionsontheCompany’sconsolidatedfinancialstatementsandontheCompany’s internalcontrolover financial reportingbasedonouraudits.WeareapublicaccountingfirmregisteredwiththePublicCompanyAccountingOversightBoard(UnitedStates)(PCAOB)andarerequiredtobeindependentwithrespecttotheCompanyinaccordancewiththeU.S.federalsecuritieslawsandtheapplicablerulesandregulationsoftheSecuritiesandExchangeCommissionandthePCAOB.

WeconductedourauditsinaccordancewiththestandardsofthePCAOB.Thosestandardsrequirethatweplanandperformtheaudits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement,whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all materialrespects.

Ourauditsoftheconsolidatedfinancialstatementsincludedperformingprocedurestoassesstherisksofmaterialmisstatementoftheconsolidatedfinancialstatements,whetherduetoerrororfraud,andperformingproceduresthatrespondtothoserisks.Suchprocedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financialstatements.Ourauditsalsoincludedevaluatingtheaccountingprinciplesusedandsignificantestimatesmadebymanagement,aswell as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financialreporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a materialweaknessexists,andtestingandevaluatingthedesignandoperatingeffectivenessof internalcontrolbasedontheassessedrisk.Ourauditsalsoincludedperformingsuchotherproceduresasweconsiderednecessaryinthecircumstances.Webelievethatourauditsprovideareasonablebasisforouropinions.

DefinitionandLimitationsofInternalControloverFinancialReporting

Acompany’sinternalcontroloverfinancialreportingisaprocessdesignedtoprovidereasonableassuranceregardingthereliabilityof financial reporting and the preparation of financial statements for external purposes in accordance with generally acceptedaccountingprinciples.Acompany’sinternalcontroloverfinancialreportingincludesthosepoliciesandproceduresthat(i)pertaintothemaintenanceofrecordsthat,inreasonabledetail,accuratelyandfairlyreflectthetransactionsanddispositionsoftheassetsofthe company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financialstatements in accordancewith generally accepted accountingprinciples, and that receipts andexpendituresof the company arebeingmade only in accordance with authorizations of management and directors of the company; and (iii) provide reasonableassurance regardingpreventionor timely detectionof unauthorized acquisition, use, or dispositionof the company’s assets thatcouldhaveamaterialeffectonthefinancialstatements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,projectionsofanyevaluationofeffectivenesstofutureperiodsaresubjecttotheriskthatcontrolsmaybecomeinadequatebecauseofchangesinconditions,orthatthedegreeofcompliancewiththepoliciesorproceduresmaydeteriorate.



CriticalAuditMatters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financialstatements thatwas communicated or required to be communicated to the audit committee and that (i) relates to accounts ordisclosures that arematerial to the consolidated financial statements and (ii) involved our especially challenging, subjective, orcomplexjudgments.Thecommunicationofcriticalauditmattersdoesnotalterinanywayouropinionontheconsolidatedfinancialstatements,takenasawhole,andwearenot,bycommunicatingthecriticalauditmatterbelow,providingaseparateopiniononthecriticalauditmatterorontheaccountsordisclosurestowhichitrelates.

RevenueRecognition-RebatesandIncentives

Asdescribed inNotes1and3 to theconsolidated financial statements, theCompanyprovidescertaincustomerswithrebatesorincentiveswhichtotaled$8.3billionfortheyearendedDecember31,2020. TheCompanyhasbusinessagreementswithcertaincustomers that provide for rebates or other support when customers meet certain volume hurdles as well as other supportincentives,whichare tied toperformance. Rebatesand incentivesare recordedasa reductionof gross revenueprimarilywhenvolume-and transaction-based revenuesare recognizedover the contractual term. Rebatesand incentivesare calculatedbaseduponestimatedcustomerperformanceandthetermsof therelatedbusinessagreements. Asdisclosedbymanagement,variousfactorsare considered inestimating customerperformance, including forecasted transactions, card issuanceandcard conversionvolumes,expectedpaymentsandhistoricalexperiencewiththatcustomer.

Theprincipalconsiderationsforourdeterminationthatperformingproceduresrelatingtorebatesandincentivesisacriticalauditmatter are (i) the significant judgment bymanagement when developing estimates related to rebates and incentives based oncustomerperformance;and(ii)ahighdegreeofauditorjudgment,subjectivityandeffortinperformingproceduresandevaluatingmanagement’s estimates related to customer performance, including the reasonableness of the various applicable factorsconsideredbymanagementintheestimate.

Addressingthematterinvolvedperformingproceduresandevaluatingauditevidenceinconnectionwithformingouroverallopinionontheconsolidatedfinancialstatements. Theseprocedures includedtestingtheeffectivenessofcontrolsrelatingtorebatesandincentives, including controls over evaluating estimated customer performance. These procedures also included, among others,evaluating the reasonablenessofestimatedcustomerperformance fora sampleof customeragreements, including (i)evaluatingrebateand incentivecontractsto identifywhetherall incentivesare identifiedandrecordedaccurately; (ii) testingmanagement’sprocessfordevelopingestimatedcustomerperformance,includingevaluatingthereasonablenessofthevariousapplicablefactorsconsideredbymanagement;and(iii)evaluatingestimatedcustomerperformanceascomparedtoactual results in theperiodthecustomerreportsactualperformance.

/s/PricewaterhouseCoopersLLP

NewYork,NewYorkFebruary12,2021

WehaveservedastheCompany’sauditorsince1989.



ConsolidatedStatementofOperations


2020 2019 2018


NetRevenue $ 15,301 $ 16,883 $ 14,950OperatingExpenses

Generalandadministrative 5,910 5,763 5,174Advertisingandmarketing 657 934 907Depreciationandamortization 580 522 459Provisionforlitigation 73 — 1,128

Totaloperatingexpenses 7,220 7,219 7,668Operatingincome 8,081 9,664 7,282OtherIncome(Expense)

Investmentincome 24 97 122Gains(losses)onequityinvestments,net 30 167 —Interestexpense (380) (224) (186)Otherincome(expense),net 5 27 (14)

Totalotherincome(expense) (321) 67 (78)Incomebeforeincometaxes 7,760 9,731 7,204Incometaxexpense 1,349 1,613 1,345NetIncome $ 6,411 $ 8,118 $ 5,859

BasicEarningsperShare $ 6.40 $ 7.98 $ 5.63Basicweighted-averagesharesoutstanding 1,002 1,017 1,041DilutedEarningsperShare $ 6.37 $ 7.94 $ 5.60Dilutedweighted-averagesharesoutstanding 1,006 1,022 1,047

Theaccompanyingnotesareanintegralpartoftheseconsolidatedfinancialstatements.



ConsolidatedStatementofComprehensiveIncome


2020 2019 2018

(inmillions)

NetIncome $ 6,411 $ 8,118 $ 5,859Othercomprehensiveincome(loss):

Foreigncurrencytranslationadjustments 345 10 (319)Incometaxeffect (59) 13 40

Foreigncurrencytranslationadjustments,netofincometaxeffect 286 23 (279)

Translationadjustmentsonnetinvestmenthedge (177) 36 96Incometaxeffect 40 (8) (21)

Translationadjustmentsonnetinvestmenthedge,netofincometaxeffect (137) 28 75

Cashflowhedges (189) 14 —Incometaxeffect 42 (3) —

Reclassificationadjustmentforcashflowhedges 4 — —Incometaxeffect (1) — —

Cashflowhedges,netofincometaxeffect (144) 11 —

Definedbenefitpensionandotherpostretirementplans (12) (21) (16)Incometaxeffect 2 3 3

Reclassificationadjustmentfordefinedbenefitpensionandotherpostretirementplans (1) (1) (2)Incometaxeffect — — —

Definedbenefitpensionandotherpostretirementplans,netofincometaxeffect (11) (19) (15)

Investmentsecuritiesavailable-for-sale (1) 3 (3)Incometaxeffect — (1) 1

Investmentsecuritiesavailable-for-sale,netofincometaxeffect (1) 2 (2)

Othercomprehensiveincome(loss),netofincometaxeffect (7) 45 (221)ComprehensiveIncome $ 6,404 $ 8,163 $ 5,638




ConsolidatedBalanceSheetDecember31,

2020 2019


AssetsCurrentassets:

Cashandcashequivalents $ 10,113 $ 6,988Restrictedcashforlitigationsettlement 586 584Investments 483 688Accountsreceivable 2,646 2,514Settlementduefromcustomers 1,706 2,995Restrictedsecuritydepositsheldforcustomers 1,696 1,370Prepaidexpensesandothercurrentassets 1,883 1,763

Totalcurrentassets 19,113 16,902Property,equipmentandright-of-useassets,net 1,902 1,828Deferredincometaxes 491 543Goodwill 4,960 4,021Otherintangibleassets,net 1,753 1,417Otherassets 5,365 4,525TotalAssets $ 33,584 $ 29,236

Liabilities,RedeemableNon-controllingInterestsandEquityCurrentliabilities:

Accountspayable $ 527 $ 489Settlementduetocustomers 1,475 2,714Restrictedsecuritydepositsheldforcustomers 1,696 1,370Accruedlitigation 842 914Accruedexpenses 5,430 5,489Currentportionoflong-termdebt 649 —Othercurrentliabilities 1,228 928

Totalcurrentliabilities 11,847 11,904Long-termdebt 12,023 8,527Deferredincometaxes 86 85Otherliabilities 3,111 2,729TotalLiabilities 27,067 23,245

CommitmentsandContingencies

RedeemableNon-controllingInterests 29 74

Stockholders’Equity

ClassAcommonstock,$0.0001parvalue;authorized3,000shares,1,396and1,391sharesissuedand987and996sharesoutstanding,respectively — —

ClassBcommonstock,$0.0001parvalue;authorized1,200shares,8and11sharesissuedandoutstanding,respectively — —

Additionalpaid-in-capital 4,982 4,787ClassAtreasurystock,atcost,409and395shares,respectively (36,658) (32,205)Retainedearnings 38,747 33,984Accumulatedothercomprehensiveincome(loss) (680) (673)MastercardIncorporatedStockholders'Equity 6,391 5,893Non-controllinginterests 97 24TotalEquity 6,488 5,917

TotalLiabilities,RedeemableNon-controllingInterestsandEquity $ 33,584 $ 29,236




ConsolidatedStatementofChangesinEquity


CommonStock Additional

Paid-InCapital

ClassATreasuryStock

RetainedEarnings

AccumulatedOther

ComprehensiveIncome(Loss)

MastercardIncorporatedStockholders'

Equity

Non-ControllingInterests

TotalEquity ClassA ClassB


BalanceatDecember31,2017 $ — $ — $ 4,365 $(20,764) $22,364 $ (497) $ 5,468 $ 29 $ 5,497

Adoptionofrevenuestandard — — — — 366 — 366 — 366

Adoptionofintra-entityassettransfersstandard — — — — (183) — (183) — (183)

Netincome — — — — 5,859 — 5,859 — 5,859

Activityrelatedtonon-controllinginterests — — — — — — — (6) (6)

Redeemablenon-controllinginterestadjustments — — — — (3) — (3) — (3)

Othercomprehensiveincome(loss) — — — — — (221) (221) — (221)

Dividends — — — — (1,120) — (1,120) — (1,120)

Purchasesoftreasurystock — — — (4,991) — — (4,991) — (4,991)

Share-basedpayments — — 215 5 — — 220 — 220BalanceatDecember31,2018 — — 4,580 (25,750) 27,283 (718) 5,395 23 5,418

Netincome — — — — 8,118 — 8,118 — 8,118

Activityrelatedtonon-controllinginterests — — — — — — — 1 1


Othercomprehensiveincome(loss) — — — — — 45 45 — 45

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


Share-basedpayments — — 207 8 — — 215 — 215BalanceatDecember31,2019 — — 4,787 (32,205) 33,984 (673) 5,893 24 5,917



ConsolidatedStatementofChangesinEquity(Continued)


CommonStock Additional

Paid-InCapital

ClassATreasuryStock

RetainedEarnings

AccumulatedOther

ComprehensiveIncome(Loss)

MastercardIncorporatedStockholders'

Equity

Non-ControllingInterests

TotalEquity ClassA ClassB


BalanceatDecember31,2019 — — 4,787 (32,205) 33,984 (673) 5,893 24 5,917

Netincome — — — — 6,411 — 6,411 — 6,411

Activityrelatedtonon-controllinginterests — — — — — — — 73 73


Othercomprehensiveincome(loss) — — — — — (7) (7) — (7)

Dividends — — — — (1,641) — (1,641) — (1,641)


Share-basedpayments — — 195 6 — — 201 — 201BalanceatDecember31,2020 $ — $ — $ 4,982 $(36,658) $38,747 $ (680) $ 6,391 $ 97 $ 6,488




ConsolidatedStatementofCashFlows FortheYearsEndedDecember31, 2020 2019 2018 (inmillions)

OperatingActivitiesNetincome $ 6,411 $ 8,118 $ 5,859

Adjustmentstoreconcilenetincometonetcashprovidedbyoperatingactivities:Amortizationofcustomerandmerchantincentives 1,072 1,141 1,235

Depreciationandamortization 580 522 459

(Gains)lossesonequityinvestments,net (30) (167) —Share-basedcompensation 254 250 196Deferredincometaxes 73 (7) (244)Other 14 24 31

Changesinoperatingassetsandliabilities:Accountsreceivable (86) (246) (317)Incometaxesreceivable (2) (202) (120)Settlementduefromcustomers 1,288 (444) (1,078)

Prepaidexpenses (1,552) (1,661) (1,769)

Accruedlitigationandlegalsettlements (73) (662) 869

Restrictedsecuritydepositsheldforcustomers 326 290 (6)

Accountspayable 26 (42) 101Settlementduetocustomers (1,242) 477 849

Accruedexpenses (114) 657 439

Long-termtaxespayable (37) 2 (20)

Netchangeinotherassetsandliabilities 316 133 (261)

Netcashprovidedbyoperatingactivities 7,224 8,183 6,223

InvestingActivitiesPurchasesofinvestmentsecuritiesavailable-for-sale (220) (643) (1,300)

Purchasesofinvestmentsheld-to-maturity (198) (215) (509)Proceedsfromsalesofinvestmentsecuritiesavailable-for-sale 361 1,098 604Proceedsfrommaturitiesofinvestmentsecuritiesavailable-for-sale 140 376 379

Proceedsfrommaturitiesofinvestmentsheld-to-maturity 121 383 929

Purchasesofpropertyandequipment (339) (422) (330)Capitalizedsoftware (369) (306) (174)

Purchasesofequityinvestments (214) (467) (91)Acquisitionofbusinesses,netofcashacquired (989) (1,440) —Settlementofinterestratederivativecontracts (175) — —

Otherinvestingactivities 3 (4) (14)

Netcashusedininvestingactivities (1,879) (1,640) (506)

FinancingActivities

Purchasesoftreasurystock (4,473) (6,497) (4,933)

Dividendspaid (1,605) (1,345) (1,044)Proceedsfromdebt,net 3,959 2,724 991

Paymentofdebt — (500) —

Acquisitionofredeemablenon-controllinginterests (49) — —

Contingentconsiderationpaid — (199) —

Taxwithholdingsrelatedtoshare-basedpayments (150) (161) (80)

Cashproceedsfromexerciseofstockoptions 97 126 104

Otherfinancingactivities 69 (15) (4)

Netcashusedinfinancingactivities (2,152) (5,867) (4,966)

Effectofexchangeratechangesoncash,cashequivalents,restrictedcashandrestrictedcashequivalents 257 (44) (6)

Netincreaseincash,cashequivalents,restrictedcashandrestrictedcashequivalents 3,450 632 745

Cash,cashequivalents,restrictedcashandrestrictedcashequivalents-beginningofperiod 8,969 8,337 7,592

Cash,cashequivalents,restrictedcashandrestrictedcashequivalents-endofperiod $ 12,419 $ 8,969 $ 8,337




Notestoconsolidatedfinancialstatements

Note1.SummaryofSignificantAccountingPolicies

Organization

Mastercard Incorporated and its consolidated subsidiaries, including Mastercard International Incorporated (“MastercardInternational”andtogetherwithMastercardIncorporated,“Mastercard”orthe“Company”),isatechnologycompanyintheglobalpaymentsindustrythatconnectsconsumers,financial institutions,merchants,governments,digitalpartners,businessesandotherorganizations worldwide, enabling them to use electronic forms of payment instead of cash and checks. The Companymakespaymentseasierandmoreefficientbyprovidingawiderangeofpaymentsolutionsandservicesthroughitsfamilyofwell-knownbrands,includingMastercard®,Maestro®andCirrus®.TheCompanyoperatesamulti-railnetworkthatofferscustomersonepartnertoturntofortheirdomesticandcross-borderpaymentneeds.Throughitsuniqueandproprietaryglobalpaymentsnetwork,whichisreferredtoasthecorenetwork,theCompanyswitches(authorizes,clearsandsettles)paymenttransactionsanddeliversrelatedproductsandservices.Mastercardhasadditionalpaymentcapabilitiesthatincludeautomatedclearinghouse(“ACH”)transactions(bothbatchandreal-timeaccount-basedpayments).TheCompanyalsoprovidesintegratedvalue-addedofferingssuchascyberandintelligence products, information and analytics services, consulting, loyalty and reward programs, processing andopenbanking.TheCompany’spaymentsolutionsoffercustomerschoiceandflexibilityandaredesignedtoensuresafetyandsecurityfortheglobalpaymentssystem.

A typical transaction on the Company’s core network involves four participants in addition to the Company: account holder (apersonorentitywhoholdsacardorusesanotherdeviceenabledforpayment), issuer(theaccountholder’sfinancial institution),merchantandacquirer(themerchant’sfinancialinstitution).TheCompanydoesnotissuecards,extendcredit,determineorreceiverevenue from interest rates or other fees charged to account holders by issuers, or establish the rates charged by acquirers inconnectionwithmerchants’acceptanceoftheCompany’sproducts.Inmostcases,accountholderrelationshipsbelongto,andaremanagedby,theCompany’sfinancialinstitutioncustomers.

SignificantAccountingPolicies

Consolidationandbasisofpresentation-TheconsolidatedfinancialstatementsincludetheaccountsofMastercardanditsmajority-ownedandcontrolledentities, includinganyvariable interestentities (“VIEs”) forwhich theCompany is theprimarybeneficiary.InvestmentsinVIEsforwhichtheCompanyisnotconsideredtheprimarybeneficiaryarenotconsolidatedandareaccountedforasequitymethodormeasurementalternativemethodinvestmentsandrecordedinotherassetsontheconsolidatedbalancesheet.AtDecember31,2020and2019,therewerenosignificantVIEswhichrequiredconsolidationandtheinvestmentswerenotconsideredmaterialtotheconsolidatedfinancialstatements.TheCompanyconsolidatesacquisitionsasofthedateinwhichtheCompanyhasobtained a controlling financial interest. Intercompany transactions and balances have been eliminated in consolidation. TheCompanyfollowsaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica(“GAAP”).

Non-controlling interests represent theequity interest notownedby theCompany andare recorded for consolidatedentities inwhich theCompanyowns less than100%of the interests. Changes inaparent’sownership interestwhile theparent retains itscontrollinginterestareaccountedforasequitytransactions,anduponlossofcontrol,retainedownershipinterestsareremeasuredatfairvalue,withanygainorlossrecognizedinearnings.For2020,2019and2018,netlossesfromnon-controllinginterestswerenotmaterialand,asaresult,amountsareincludedontheconsolidatedstatementofoperationswithinotherincome(expense).

Useofestimates -Thepreparationoffinancialstatements inconformitywithGAAPrequiresmanagementtomakeestimatesandassumptionsthataffectthereportedamountsofassetsandliabilitiesanddisclosureofcontingentassetsandliabilitiesatthedateofthefinancialstatementsandthereportedamountsofrevenueandexpensesduringthereportingperiods.Futureeventsandtheireffectscannotbepredictedwithcertainty,includingthepotentialimpactsanddurationoftheCOVID-19pandemic,aswellasotherfactors; accordingly, accounting estimates require the exercise of judgment. These financial statements were prepared usinginformationreasonablyavailableasofDecember31,2020andthroughthedateofthisReport. Theaccountingestimatesusedinthe preparation of the Company’s consolidated financial statements may change as new events occur, as more experience isacquired, as additional information is obtainedandas theCompany’s operating environment changes. Actual resultsmaydifferfromtheseestimates.

Revenuerecognition -Revenueisrecognizedtodepictthetransferofpromisedgoodsorservicestocustomersinanamountthatreflects the consideration towhich the Company expects to be entitled to in exchange for those goods or services. Revenue isprimarilygeneratedfromassessingcustomersbasedonthedollarvolumeofactivity,orgrossdollarvolume,ontheproductsthatcarrytheCompany’sbrands,fromfeestoissuers,acquirersandotherstakeholdersforprovidingswitchingservices,aswellasfromvalue-addedproductsandservicesthataretypicallyintegratedandsoldwiththeCompany’spaymentofferings.

PARTIIITEM8.FINANCIALSTATEMENTSANDSUPPLEMENTARYDATA-NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS


Volume-based revenue (domestic assessments and cross-border volume fees) is recorded as revenue in the period it is earned,whichisprimarilybasedontherelatedvolumegeneratedonthecards.Certainvolume-basedrevenueisbaseduponinformationreported by customers. Transaction-based revenue (transaction processing) is primarily based on the number and type oftransactions and is recognized as revenue in the same period in which the related transactions occur. Other payment-relatedproductsandservicesarerecognizedasrevenueintheperiodinwhichtherelatedservicesareperformedortransactionsoccur.Forservicesprovidedtocustomerswheredeliveryinvolvestheuseofathird-party,theCompanyrecognizesrevenueonagrossbasisifitactsastheprincipal,controllingtheservicetothecustomerandonanetbasisifitactsastheagent,arrangingfortheservicetobeprovided.

Mastercardhasbusinessagreementswithcertaincustomersthatprovideforrebatesorothersupportwhenthecustomersmeetcertainvolumehurdlesaswellasothersupportincentives,whicharetiedtoperformance.Rebatesandincentivesarerecordedasareduction of gross revenue primarily when volume- and transaction-based revenues are recognized over the contractual term.Rebates and incentives are calculated based upon estimated customer performance and the terms of the related businessagreements.Inaddition,Mastercardmaymakepaymentstoacustomerdirectlyrelatedtoenteringintoanagreement,whicharegenerallycapitalizedandamortizedoverthelifeoftheagreementonastraight-linebasis.

Contractassetsincludeunbilledconsiderationtypicallyresultingfromexecuteddataanalyticandconsultingservicesperformedforcustomers inconnectionwithMastercard’spaymentnetworkservicearrangements. Collection for theseservices typicallyoccursover the contractual term. Contract assets are included in prepaid expenses and other current assets and other assets on theconsolidatedbalancesheet.

The Company defers the recognition of revenuewhen consideration has been received prior to the satisfaction of performanceobligations. As these performance obligations are satisfied, revenue is subsequently recognized. Deferred revenue is primarilyderivedfromdataanalyticandconsultingservices. Deferredrevenueisincludedinothercurrentliabilitiesandotherliabilitiesontheconsolidatedbalancesheet.

Business combinations - The Company accounts for business combinations under the acquisition method of accounting. TheCompanymeasuresthetangibleand intangible identifiableassetsacquired, liabilitiesassumed,anynon-controlling interest intheacquireeandcontingentconsiderationat fairvalueasof theacquisitiondate. Acquisition-relatedcostsareexpensedas incurredandareincludedingeneralandadministrativeexpensesontheconsolidatedstatementofoperations. Anyexcesspurchasepriceover the fair value of net assets acquired, including identifiable intangible assets, is recorded as goodwill. Measurement periodadjustments, if any, to the preliminary estimated fair value of the intangibles assets as of the acquisition date are recorded ingoodwill.

Goodwillandotherintangibleassets-Indefinite-livedintangibleassetsconsistofgoodwill,whichrepresentsthesynergiesexpectedtoariseaftertheacquisitiondateandtheassembledworkforce,andcustomerrelationships.Finite-livedintangibleassetsconsistofcapitalizedsoftwarecosts,customerrelationshipsandotherintangibleassets.Intangibleassetswithfiniteusefullivesareamortizedover their estimated useful lives, on a straight-line basis, which range fromone to twenty years. Capitalized software includesinternal and external costs incurred directly related to the design, development and testing phases of each capitalized softwareproject.

Impairmentofassets-Goodwillandindefinite-livedintangibleassetsarenotamortizedbuttestedannuallyforimpairmentatthereporting unit level in the fourth quarter, or sooner when circumstances indicate an impairment may exist. The impairmentevaluationforgoodwillutilizesaqualitativeassessmenttodeterminewhether it ismorelikelythannotthatgoodwill is impaired.Thequalitative factorsmay include,butarenot limitedto,macroeconomicconditions, industryandmarketconditions,operatingenvironment, financialperformanceandother relevantevents. If it isdetermined that it ismore likely thannot thatgoodwill isimpaired, then theCompany is required toperformaquantitativegoodwill impairment test. If the fair valueofa reportingunitexceeds the carrying value, goodwill is not impaired. If the fair value of the reporting unit is less than its carrying value, thengoodwillisimpairedandtheexcessofthereportingunit’scarryingvalueoverthefairvalueisrecognizedasanimpairmentcharge.

The impairment test for indefinite-lived intangible assets consists of a qualitative assessment to evaluate relevant events andcircumstances thatcouldaffect thesignificant inputsused todetermine the fairvalueof indefinite-lived intangibleassets. If thequalitativeassessmentindicatesthatitismorelikelythannotthatindefinite-livedintangibleassetsareimpaired,thenaquantitativeassessmentisrequired.

Long-lived assets, other than goodwill and indefinite-lived intangible assets, are tested for impairment whenever events orcircumstancesindicatethattheircarryingamountmaynotberecoverable. Ifthecarryingvalueoftheassetcannotberecoveredfromestimatedfuturecashflows,undiscountedandwithoutinterest,thefairvalueoftheassetiscalculatedusingthepresentvalueofestimatednetfuturecashflows.Ifthecarryingamountoftheassetexceedsitsfairvalue,animpairmentisrecorded.

Impairmentcharges,ifany,arerecordedingeneralandadministrativeexpensesontheconsolidatedstatementofoperations.



Litigation-TheCompanyisapartytocertainlegalandregulatoryproceedingswithrespecttoavarietyofmatters.TheCompanyevaluatesthe likelihoodofanunfavorableoutcomeofall legalorregulatoryproceedingstowhich it isapartyandaccruesa losscontingencywhenthelossisprobableandreasonablyestimable.Losscontingenciesarerecordedinprovisionforlitigationontheconsolidatedstatementofoperations.Thesejudgmentsaresubjectivebasedonthestatusofthelegalorregulatoryproceedings,themerits of its defenses and consultationwith in-house and external legal counsel. Legal costs are expensed as incurred andrecordedingeneralandadministrativeexpensesontheconsolidatedstatementofoperations.

Settlement and other riskmanagement -Mastercard’s rules guarantee the settlement of many of the transactions between itscustomers.SettlementexposureistheoutstandingsettlementrisktocustomersunderMastercard’srulesduetothedifferenceintiming between the payment transaction date and subsequent settlement. While the term and amount of the guarantee areunlimited,thedurationofsettlementexposureisshorttermandtypicallylimitedtoafewdays.

TheCompanyalsoentersintoagreementsintheordinarycourseofbusinessunderwhichtheCompanyagreestoindemnifythirdpartiesagainstdamages,lossesandexpensesincurredinconnectionwithlegalandotherproceedingsarisingfromrelationshipsortransactionswith theCompany. As theextentof theCompany’sobligationsunder theseagreementsdependsentirelyupon theoccurrenceoffutureevents,theCompany’spotentialfutureliabilityundertheseagreementsisnotdeterminable.

TheCompanyaccountsforeachofitsguaranteesbyrecordingtheguaranteeatitsfairvalueattheinceptionormodificationdatethroughearnings.

Incometaxes-TheCompanyfollowsanassetandliabilitybasedapproachinaccountingforincometaxesasrequiredunderGAAP.Deferred income taxassets and liabilities are recorded to reflect the tax consequenceson future yearsof temporarydifferencesbetween the financial statement carrying amounts and income tax bases of assets and liabilities. Deferred income taxes aredisplayed separately as noncurrent assets and liabilities on the consolidated balance sheet. Valuation allowances are providedagainst assets which are notmore likely than not to be realized. The Company recognizes all material tax positions, includinguncertain taxpositions inwhich it ismore likely thannot that thepositionwill be sustainedbasedon its technicalmerits and ifchallenged by the relevant taxing authorities. At each balance sheet date, unresolved uncertain tax positions are reassessed todetermine whether subsequent developments require a change in the amount of recognized tax benefit. The allowance foruncertain tax positions is recorded in other current and noncurrent liabilities on the consolidated balance sheet. The Companyrecords interest expense related to income taxmatters as interest expense on the consolidated statement of operations. TheCompanyincludespenaltiesrelatedtoincometaxmattersintheincometaxprovision.

Cashandcashequivalents-Cashandcashequivalentsincludecertaininvestmentswithdailyliquidityandwithanoriginalmaturityofthreemonthsorlessfromthedateofpurchase.Cashequivalentsarerecordedatcost,whichapproximatesfairvalue.

Restrictedcash-TheCompanyclassifiescashandcashequivalentsasrestrictedwhenit isunavailableforwithdrawaloruseinitsgeneraloperations. TheCompanyhasthefollowingtypesofrestrictedcashandrestrictedcashequivalentswhichareincludedinthereconciliationofbeginning-of-periodandend-of-periodamountsshownontheconsolidatedstatementofcashflows:

• Restrictedcashforlitigationsettlement-TheCompanyhasrestrictedcashforlitigationwithinaqualifiedsettlementfundrelatedtothesettlementagreementfortheU.S.merchantclasslitigation.Thefundscontinuetoberestrictedforpaymentsuntilthelitigationmatterisresolved.

• Restrictedsecuritydepositsheldforcustomers-TheCompanyrequirescollateralfromcertaincustomersforsettlementoftheirtransactions.Themajorityofcollateralforsettlementisintheformofstandbylettersofcreditandbankguaranteeswhicharenotrecordedontheconsolidatedbalancesheet.Additionally,theCompanyholdscashdepositsandcertificatesofdepositfromcertaincustomersascollateral for settlementof their transactions,whichare recordedasassetson theconsolidatedbalancesheet. These assets are fully offset by corresponding liabilities included on the consolidated balance sheet. These securitydepositsaretypicallyheldforthedurationoftheagreementwiththecustomers.

• Otherrestrictedcashbalances-TheCompanyhasotherrestrictedcashbalanceswhichincludecontractuallyrestricteddeposits,aswellascashbalancesthatarerestrictedbasedontheCompany’sintentionwithregardtousage.Thesefundsareclassifiedontheconsolidatedbalancesheetwithinprepaidexpensesandothercurrentassetsandotherassets.

Fairvalue -TheCompanymeasurescertainfinancialassetsandliabilitiesatfairvalueonarecurringbasisbyestimatingthepricethatwouldbereceiveduponthesaleofanassetorpaidtotransferaliabilityinanorderlytransactionbetweenmarketparticipants.TheCompanyclassifiestheserecurringfairvaluemeasurementsintoathree-levelhierarchy(“ValuationHierarchy”).

TheValuationHierarchy isbasedupon the transparencyof inputs to thevaluationofanassetor liabilityasof themeasurementdate.Afinancialinstrument’scategorizationwithintheValuationHierarchyisbaseduponthelowestlevelofinputthatissignificanttothefairvaluemeasurement.ThethreelevelsoftheValuationHierarchyareasfollows:

• Level1-inputstothevaluationmethodologyarequotedprices(unadjusted)foridenticalassetsorliabilitiesinactivemarkets



• Level2 - inputs to thevaluationmethodology includequotedprices forsimilarassetsand liabilities inactivemarkets,quotedpricesforidenticalorsimilarassetsandliabilitiesininactivemarketsandinputsthatareobservablefortheassetorliability

• Level3-inputstothevaluationmethodologyareunobservableandcannotbedirectlycorroboratedbyobservablemarketdata

Certainassetsaremeasuredatfairvalueonanonrecurringbasis.TheCompany’snon-financialassetsmeasuredatfairvalueonanonrecurring basis include property, equipment and right-of-use assets, goodwill and other intangible assets. These assets aresubjecttofairvalueadjustmentsincertaincircumstances,suchaswhenthereisevidenceofimpairment.

Thevaluationmethodsforgoodwillandotherintangibleassetsacquiredinbusinesscombinationsinvolveassumptionsconcerningcomparable company multiples, discount rates, growth projections and other assumptions of future business conditions. TheCompanyusesvariousvaluationtechniquestodeterminefairvalue,primarilydiscountedcashflowsanalysis,relief-from-royalty,andmulti-periodexcessearningsforestimatingthefairvalueofits intangibleassets. Astheassumptionsemployedtomeasuretheseassetsarebasedonmanagement’sjudgmentusinginternalandexternaldata,thesefairvaluedeterminationsareclassifiedinLevel3oftheValuationHierarchy.

Contingent consideration - Certain business combinations involve the potential for future payment of consideration that iscontingent upon the achievement of performance milestones. These liabilities are classified within Level 3 of the ValuationHierarchyas the inputsused tomeasure fairvalueareunobservableand requiremanagement’s judgment. The fairvalueof thecontingent consideration at the acquisitiondate and subsequentperiods is determinedutilizing an incomeapproachbasedon aMonteCarlotechniqueandisrecordedinothercurrentliabilitiesandotherliabilitiesontheconsolidatedbalancesheet.Changestoprojectedperformancemilestonesoftheacquiredbusinessescouldresultinahigherorlowercontingentconsiderationliability.Thechangesinfairvalueasaresultofupdatedassumptionsarerecordedingeneralandadministrativeexpensesontheconsolidatedstatementofoperations.

Investmentsecurities-TheCompanyclassifiesinvestmentsasavailable-for-saleorheld-to-maturityatthedateofacquisition.

• Available-for-saledebtsecurities:

◦ InvestmentsindebtsecuritiesthatareavailabletomeettheCompany’scurrentoperationalneedsareclassifiedascurrentassets and the securities that arenot available for currentoperational needs are classified asnon-current assetson theconsolidatedbalancesheet.

Thedebtsecuritiesarecarriedatfairvalue,withunrealizedgainsandlosses,netoftax,recordedasaseparatecomponentofaccumulatedothercomprehensiveincome(loss)ontheconsolidatedstatementofcomprehensiveincome.Netrealizedgainsandlossesondebtsecuritiesarerecognizedininvestmentincomeontheconsolidatedstatementofoperations.Thespecificidentificationmethodisusedtodeterminerealizedgainsandlosses.

TheCompanyevaluatesitsdebtsecuritiesforimpairmentonanongoingbasis.Whentherehasbeenadeclineinfairvalueofadebtsecuritybelowtheamortizedcostbasis,theCompanyrecognizesanimpairmentif:(1)ithastheintenttosellthesecurity;(2)itismorelikelythannotthatitwillberequiredtosellthesecuritybeforerecoveryoftheamortizedcostbasis;or (3) it does not expect to recover the entire amortized cost basis of the security. The credit loss component of theimpairmentisrecognizedasanallowanceandrecordedinother income(expense),netontheconsolidatedstatementofoperationswhilethenon-creditrelatedlossremainsinaccumulatedothercomprehensiveincome(loss)untilrealizedfromasaleorsubsequentimpairment.

• Held-to-maturitysecurities:

◦ Time deposits - The Company classifies time deposits with original maturities greater than three months as held-to-maturity.Held-to-maturitysecuritiesthatmaturewithinoneyearareclassifiedascurrentassetswithininvestmentsontheconsolidatedbalancesheetwhileheld-to-maturitysecuritieswithmaturitiesofgreaterthanoneyearareclassifiedasnon-currentassets.Timedepositsarecarriedatamortizedcostontheconsolidatedbalancesheetandareintendedtobehelduntilmaturity.



Equityinvestments-TheCompanyholdsequitysecuritiesofpubliclytradedandprivatelyheldcompanies.

• Marketable equity securities -Marketable equity securities are strategic investments in publicly traded companies and aremeasuredatfairvalueusingquotedprices intheirrespectiveactivemarketswithchangesrecordedthroughgain(losses)onequityinvestments,netontheconsolidatedstatementofoperations.Securitiesthatarenotforuseincurrentoperationsareclassifiedinotherassetsontheconsolidatedbalancesheet.

• Nonmarketableequityinvestments-TheCompany’snonmarketableequityinvestments,whicharereportedinotherassetsontheconsolidatedbalancesheet, includeinvestmentsinprivatelyheldcompanieswithoutreadilydeterminablemarketvalues.The Company uses discounted cash flows and market assumptions to estimate the fair value of its nonmarketable equityinvestmentswhencertaineventsorcircumstancesindicatethatimpairmentmayexist.TheCompany’snonmarketableequityinvestmentsareaccountedforundertheequitymethodormeasurementalternativemethod.

◦ Equitymethod-TheCompanyaccountsforinvestmentsincommonstockorin-substancecommonstockundertheequitymethodof accountingwhen it has the ability to exercise significant influenceover the investee, generallywhen it holdsbetween 20% and 50% ownership in the entity. The excess of the cost over the underlying net equity of investmentsaccountedforundertheequitymethodisallocatedtoidentifiabletangibleandintangibleassetsandliabilitiesbasedonfairvaluesatthedateofacquisition.Theamortizationoftheexcessofthecostovertheunderlyingnetequityofinvestmentsand Mastercard’s share of net earnings or losses of entities accounted for under the equity method of accounting isincluded in other income (expense), net on the consolidated statementof operations. In addition, investments in flow-throughentitiessuchaslimitedpartnershipsandlimitedliabilitycompaniesarealsoaccountedforundertheequitymethodwhen the Company has the ability to exercise significant influence over the investee, generally when the investmentownershippercentageisequaltoorgreaterthan5%oftheoutstandingownershipinterest.TheCompany’sshareofnetearnings or losses for these investments are included in gains (losses) on equity investments, net on the consolidatedstatementofoperations.

◦ Measurementalternativemethod-TheCompanyaccountsforinvestmentsincommonstockorin-substancecommonstockunderthemeasurementalternativemethodofaccountingwhenitdoesnotexercisesignificantinfluence,generallywhenitholdslessthan20%ownershipintheentityorwhentheinterestinalimitedpartnershiporlimitedliabilitycompanyislessthan5%andtheCompanyhasnosignificantinfluenceovertheoperationoftheinvestee.InvestmentsincompaniesthatMastercard does not control, but that are not in the form of common stock or in-substance common stock, are alsoaccounted for under the measurement alternative method of accounting. Measurement alternative investments aremeasured at cost, less any impairment and adjusted for changes resulting from observable price changes in orderlytransactions for identicalor similar investmentsof the same issuer. Fair valueadjustments, aswell as impairments, areincludedingain(losses)onequityinvestments,netontheconsolidatedstatementofoperations.

Derivativeandhedginginstruments -TheCompany’sderivativefinancial instrumentsarerecordedaseitherassetsor liabilitiesonthebalancesheetandmeasuredatfairvalue.TheCompany’sforeignexchangeandinterestratederivativecontractsareincludedinLevel 2of theValuationHierarchy as the fair valueof the contracts arebasedon inputs,which areobservablebasedonbrokerquotes for the same or similar instruments. The Company does not enter into derivative contracts for trading or speculativepurposes.Forderivativecontractsthatarenotdesignatedashedginginstruments,realizedandunrealizedgainsandlossesfromthechangeinfairvalueofthecontractsarerecognizedincurrentearnings.

The Company’s derivatives that are designated as hedging instruments are required tomeet established accounting criteria. Inaddition,aneffectivenessassessmentisrequiredtodemonstratethatthederivativeisexpectedtobehighlyeffectiveatoffsettingchangesinfairvalueorcashflowsoftheunderlyingexposurebothatinceptionofthehedgingrelationshipandonanongoingbasis.Themethodofassessinghedgeeffectivenessandmeasuringhedgeresultsisformallydocumentedathedgeinceptionandassessedat leastquarterlythroughoutthedesignatedhedgeperiod. Forcashflowhedges,thefairvalueadjustmentsarerecorded,netoftax,inothercomprehensiveincome(loss)ontheconsolidatedstatementofcomprehensiveincome.Anygainsandlossesdeferredinaccumulatedothercomprehensiveincome(loss)aresubsequentlyreclassifiedtothecorrespondinglineitemontheconsolidatedstatementof operationswhen theunderlyinghedged transactions impact earnings. For hedging instruments that areno longerdeemedhighlyeffective,hedgeaccountingisdiscontinuedprospectively,andanygainsandlossesremaininginaccumulatedothercomprehensiveincome(loss)arereclassifiedtoearningswhentheunderlyingforecastedtransactionoccurs.Ifitisprobablethattheforecasted transactionwillno longeroccur, theassociatedgainsor losses inaccumulatedothercomprehensive income(loss)arereclassifiedtothecorrespondinglineitemontheconsolidatedstatementofoperationsincurrentearnings.

TheCompanyhasnumerousinvestmentsinitsforeignsubsidiaries.Thenetassetsofthesesubsidiariesareexposedtovolatilityinforeigncurrencyexchangerates.TheCompanymayuseforeigncurrencydenominateddebtand/orderivativeinstrumentstohedgeaportionof itsnet investment in foreignoperationsagainstadversemovements inexchange rates. Theeffectiveportionof theforeign currency gains and losses related to the hedging instruments are reported in accumulated other comprehensive income(loss) on the consolidated balance sheet as a cumulative translation adjustment component of equity. Amounts excluded from



effectiveness testingofnet investmenthedgesare recognized inearningsover the lifeof thehedging instrument. TheCompanyevaluatestheeffectivenessofthenetinvestmenthedgeeachquarter.

Settlement due from/due to customers - The Company operates systems for clearing and settling payment transactions amongcustomers. Net settlements are generally cleared daily among customers through settlement cash accounts bywire transfer orotherbankclearingmeans. However,sometransactionsmaynotsettleuntilsubsequentbusinessdays,resultinginamountsduefromandduetocustomers.

Property, equipment and right-of-use assets - Property and equipment are stated at cost less accumulated depreciation andamortization. Depreciation and amortization is computed using the straight-linemethod over the estimated useful lives of theassets. Depreciationof leasehold improvements and amortizationof finance leases is included in depreciation and amortizationexpense on the consolidated statement of operations. Operating lease amortization expense is included in general andadministrativeexpensesontheconsolidatedstatementofoperations.

TheusefullivesoftheCompany’sassetsareasfollows:

AssetCategory EstimatedUsefulLife

Buildings 30years

Buildingequipment 10-15years

Furnitureandfixturesandequipment 3-5years

Leaseholdimprovements Shorteroflifeofimprovementorleaseterm

Right-of-useassets Shorteroflifeoftheassetorleaseterm

TheCompanydeterminesifacontractis,orcontains,aleaseatcontractinception.TheCompany’sright-of-use(“ROU”)assetsareprimarilyrelatedtooperatingleasesforofficespace,automobilesandotherequipment.Leasesareincludedinproperty,equipmentandright-of-useassets,othercurrentliabilitiesandotherliabilitiesontheconsolidatedbalancesheet.

ROUassetsrepresenttherighttouseanunderlyingassetfortheleasetermandleaseliabilitiesrepresenttheobligationtomakeleasepaymentsarising fromthe lease. ROUassetsand lease liabilitiesare recognizedat thecommencementdatebasedon thepresentvalueof leasepaymentsovertheleaseterm. Inaddition,ROUassets includeinitialdirectcosts incurredbythelesseeaswellasanyleasepaymentsmadeatorbeforethecommencementdate,andexcludeleaseincentives. AsmostoftheCompany'sleasesdonotprovideanimplicitrate,theCompanyusesitsincrementalborrowingratebasedontheinformationavailableatthecommencementdateindeterminingthepresentvalueofleasepayments.TheincrementalborrowingrateisdeterminedbyusingtherateofinterestthattheCompanywouldpaytoborrowonacollateralizedbasisanamountequaltotheleasepaymentsforasimilar term and in a similar economic environment. Lease terms include options to extend or terminate the lease when it isreasonablycertainthattheCompanywillexercisethatoption.LeaseswithatermofoneyearorlessareexcludedfromROUassetsandliabilities.

TheCompanyexcludesvariableleasepaymentsinmeasuringROUassetsandleaseliabilities,otherthanthosethatdependonanindex,arateorarein-substancefixedpayments. Leaseandnonleasecomponentsaregenerallyaccountedforseparately. Whenavailable,considerationisallocatedtotheseparateleaseandnonleasecomponentsinaleasecontractonarelativestandalonepricebasisusingobservablestandaloneprices.

Pensionandotherpostretirementplans-TheCompanyrecognizesthefundedstatusofitssingle-employerdefinedbenefitpensionplansandpostretirementplansasassetsorliabilitiesonitsconsolidatedbalancesheetandrecognizeschangesinthefundedstatusintheyearinwhichthechangesoccurthroughaccumulatedothercomprehensiveincome(loss).ThefundedstatusismeasuredasthedifferencebetweenthefairvalueofplanassetsandtheprojectedbenefitobligationatDecember31,themeasurementdate.Overfundedplans, ifany,areaggregatedand recorded inotherassets,whileunderfundedplansareaggregatedand recordedasaccruedexpensesandotherliabilitiesontheconsolidatedbalancesheet.

Netperiodicpensionandpostretirementbenefitcost/(income),excludingtheservicecostcomponent,isrecognizedinotherincome(expense) on the consolidated statement of operations. These costs include interest cost, expected return on plan assets,amortization of prior service costs or credits and gains or losses previously recognized as a component of accumulated othercomprehensiveincome(loss).Theservicecostcomponentisrecognizedingeneralandadministrativeexpensesontheconsolidatedstatementofoperations.

Definedcontributionplans-TheCompany’scontributionstodefinedcontributionplansarerecordedasemployeesrenderservicetotheCompany.Thechargeisrecordedingeneralandadministrativeexpensesontheconsolidatedstatementofoperations.



Advertisingandmarketing-ExpensesincurredtopromoteMastercard’sbrand,productsandservicesarerecognizedinadvertisingandmarketingontheconsolidatedstatementofoperations.Thetimingofrecognitionisdependentonthetypeofadvertisingormarketingexpense.

Foreign currency remeasurement and translation -Monetary assets and liabilities are remeasured to functional currencies usingcurrentexchangeratesineffectatthebalancesheetdate.Non-monetaryassetsandliabilitiesarerecordedathistoricalexchangerates.Revenueandexpenseaccountsareremeasuredattheweighted-averageexchangeratefortheperiod.Resultingexchangegainsandlossesrelatedtoremeasurementare includedingeneralandadministrativeexpensesontheconsolidatedstatementofoperations.

Where a non-U.S. currency is the functional currency, translation from that functional currency to U.S. dollars is performed forbalancesheetaccountsusingcurrentexchangeratesineffectatthebalancesheetdateandforrevenueandexpenseaccountsusingaweighted-averageexchangeratefortheperiod.Resultingtranslationadjustmentsarereportedasacomponentofaccumulatedothercomprehensiveincome(loss).

Treasurystock -TheCompanyrecordstherepurchaseofsharesof itscommonstockatcostonthetradedateofthetransaction.Thesesharesareconsideredtreasurystock,which isareductiontostockholders’equity. Treasurystock is includedinauthorizedandissuedsharesbutexcludedfromoutstandingshares.

Share-basedpayments-TheCompanymeasuresshare-basedcompensationexpenseatthegrantdate,basedontheestimatedfairvalueof theawardanduses the straight-linemethodof attribution,netof estimated forfeitures, for expensingawardsover therequisiteemployeeserviceperiod.TheCompanyestimatesthefairvalueofitsnon-qualifiedstockoptionawards(“Options”)usingaBlack-Scholesvaluationmodel.Thefairvalueofrestrictedstockunits(“RSUs”)isdeterminedandfixedonthegrantdatebasedontheCompany’sstockprice,adjustedfortheexclusionofdividendequivalents.TheMonteCarlosimulationvaluationmodelisusedtodetermine thegrantdate fairvalueofperformancestockunits (“PSUs”)granted. All share-basedcompensationexpensesarerecordedingeneralandadministrativeexpensesontheconsolidatedstatementofoperations.

Redeemablenon-controllinginterests-TheCompany’sbusinesscombinationsmayincludeprovisionsallowingnon-controllingequityownerstheabilitytorequiretheCompanytopurchaseadditional interests inthesubsidiaryattheirdiscretion. The interestsareinitiallyrecordedatfairvalueandinsubsequentreportingperiodsareaccretedoradjustedtotheestimatedredemptionvalue.Theadjustments to the redemptionvalueare recorded to retainedearningsoradditionalpaid-in capitalon theconsolidatedbalancesheet. The redeemable non-controlling interests are considered temporary and reported outside of permanent equity on theconsolidatedbalance sheetat thegreaterof thecarryingamountadjusted for thenon-controlling interest’s shareofnet income(loss)oritsredemptionvalue.

Earnings per share - The Company calculates basic earnings per share (“EPS”) by dividing net income by the weighted-averagenumberofcommonsharesoutstandingduringtheyear.DilutedEPSiscalculatedbydividingnetincomebytheweighted-averagenumberofcommonsharesoutstandingduringtheyear,adjustedforthepotentiallydilutiveeffectofstockoptionsandunvestedstockunitsusingthetreasurystockmethod.TheCompanymayberequiredtocalculateEPSusingthetwo-classmethodasaresultofitsredeemablenon-controllinginterests.Ifredemptionvalueexceedsthefairvalueoftheredeemablenon-controllinginterests,theexcesswouldbeareductiontonetincomefortheEPScalculation.

Accountingpronouncementsnotyetadopted

Simplifyingtheaccountingforincometaxes-InDecember2019,theFASBissuedaccountingguidancetosimplifytheaccountingforincometaxes.Thisguidanceincludestheremovalofcertainexceptionstothegeneralincometaxaccountingprinciplesandprovidesclarityandsimplificationtootherareasofincometaxaccountingbyamendingtheexistingguidance.TheguidanceiseffectiveforperiodsbeginningafterDecember15,2020.TheCompanywilladoptthisguidanceeffectiveJanuary1,2021anddoesnotexpecttheimpactstobematerial.

Reference Rate Reform - In March 2020, the FASB issued accounting guidance to provide temporary optional expedients andexceptions to the current contractmodifications andhedge accounting guidance in light of the expectedmarket transition fromLIBORtoalternativerates.Thenewguidanceprovidesoptionalexpedientsandexceptionstotransactionsaffectedbyreferenceratereformifcertaincriteriaaremet.Thetransactionsprimarilyinclude(1)contractmodifications,(2)hedgingrelationships,and(3)saleor transfer of debt securities classified as held-to-maturity. The amendmentswere effective immediately upon issuance of theupdate. Companiesmayelect toadopt theamendmentsprospectively totransactionsexistingasoforenteredfromthedateofadoptionthroughDecember31,2022.TheCompanydoesnotexpecttheimpactstobematerial.



Note2.Acquisitions

In 2020 and 2019, the Company acquired several businesses for total consideration of$1.1 billion and $1.5 billion, respectively,representing both cash and contingent consideration. There were no acquisitions in 2018. These acquisitions align with theCompany’s strategy to grow, diversify and build the Company’s business. Refer to Note 1 (Summary of Significant AccountingPolicies) for the valuation techniquesMastercard utilizes to fair value the respective components of business combinations andcontingentconsideration.Theresidualvalueallocatedtogoodwillisprimarilyattributabletothesynergiesexpectedtoariseaftertheacquisitiondateandamajorityofthegoodwillisnotexpectedtobedeductibleforlocaltaxpurposes.

In2020, theCompany finalized thepurchaseaccounting forbusinessesacquiredduring2019and$185millionof thebusinessesacquiredin2020.TheCompanyisevaluatingandfinalizingthepurchaseaccountingfortheremainderofthebusinessesacquiredduring2020. Thepreliminaryestimatedand final fair valuesof thepurchasepriceallocations inaggregate,asof theacquisitiondates,arenotedbelowfortheyearsendedDecember31.

2020 2019

(inmillions)

Assets:

Cashandcashequivalents $ 6 $ 54

Othercurrentassets 14 143

Otherintangibleassets 237 395

Goodwill 844 1,076

Otherassets 11 48

Totalassets 1,112 1,716

Liabilities:

Othercurrentliabilities 15 121

Deferredincometaxes 23 52

Otherliabilities 8 32

Totalliabilities 46 205

Netassetsacquired $ 1,066 $ 1,511

ThefollowingtablesummarizestheidentifiedintangibleassetsacquiredduringtheyearsendedDecember31:

2020 2019 2020 2019

AcquisitionDateFairValue Weighted-AverageUsefulLife

(inmillions) (inyears)

Developedtechnologies $ 122 $ 199 6.3 7.7

Customerrelationships 114 178 12.0 12.6

Other 1 18 1.0 5.0

Otherintangibleassets $ 237 $ 395 9.0 9.7

Pro forma informationrelatedtotheacquisitionswasnot includedbecausethe impactontheCompany'sconsolidatedresultsofoperationswasnotconsideredtobematerial.

Amongthebusinessesacquiredin2020,thelargestacquisitionrelatestoFinicityCorporation(“Finicity”),anopen-bankingprovider,headquartered in Salt Lake City, Utah. On November 18, 2020, Mastercard acquired 100% equity interest in Finicity for cashconsiderationof$809million. In addition, the Finicity sellershave thepotential toearn contingent considerationofup to$160millionifcertainrevenuetargetsaremetin2021.Asoftheacquisitiondate,thefairvalueofthecontingentconsiderationwas$71million.Thebusinessesacquiredin2019werenotindividuallysignificanttoMastercard.

PendingAcquisition

InAugust2019,MastercardenteredintoadefinitiveagreementtoacquirethemajorityoftheCorporateServicesbusinessofNetsDenmark A/S, for €2.85 billion (approximately $3.5 billion as of December 31, 2020) after adjusting for cash and certain other



liabilitiesatclosing.Thependingacquisitionprimarilycomprisestheclearingandinstantpaymentservices,ande-billingsolutionsofNetsDenmarkA/S’sCorporateServicesbusiness. TheCompanyhassecuredconditionalapprovalfromtheEuropeanCommissionand,subjecttootherclosingconditions,anticipatescompletingtheacquisitioninthefirstquarterof2021,orshortlythereafter.

Note3.Revenue

Mastercard’scorenetworkinvolvesfourparticipantsinadditiontotheCompany:accountholders(apersonorentitywhoholdsacardorusesanotherdeviceenabledforpayment),issuers(theaccountholders’financialinstitutions),merchantsandacquirers(themerchants’financialinstitutions).RevenuefromcontractswithcustomersisrecognizedwhenservicesareperformedinanamountthatreflectstheconsiderationtowhichtheCompanyexpectstobeentitledtoinexchangeforthoseservices.Revenuerecognizedfromdomesticassessments,cross-bordervolumefeesandtransactionprocessingarederivedfromMastercard’spaymentnetworkservices. Revenue is primarily generated by charging fees to issuers, acquirers and other stakeholders for providing switchingservices,aswellasbyassessingcustomersbasedprimarilyonthedollarvolumeofactivity,orgrossdollarvolume,ontheproductsthatcarrytheCompany’sbrands.RevenueisgenerallyderivedfrominformationaccumulatedbyMastercard’ssystemsorreportedby customers. In addition, the Company generates other revenues from value-added products and services that are typicallyintegrated and sold with the Company’s payment offerings and are recognized as revenue in the period in which the relatedtransactionsoccurorservicesareperformed.

ThepricestructureforMastercard’sproductsandservicesisdependentonthenatureofvolumes,typesoftransactionsandtypeofproductsandservicesofferedtocustomers.Netrevenuecanbeimpactedbythefollowing:

• domesticorcross-bordertransactions

• geographicregionorcountryinwhichthetransactionoccurs

• volumes/transactionssubjecttotieredrates

• processedornotprocessedbytheCompany

• amountofusageoftheCompany’sotherproductsorservices

• amountofrebatesandincentivesprovidedtocustomers

TheCompanyclassifiesitsnetrevenueintothefollowingfivecategories:

Domesticassessmentsarefeeschargedtoissuersandacquirersbasedprimarilyonthedollarvolumeofactivityoncardsandotherdevices that carry theCompany’sbrandswhere themerchantcountryand thecountryof issuanceare thesame. Revenue fromdomesticassessmentsisrecordedasrevenueintheperioditisearned,whichiswhentherelatedvolumeisgeneratedonthecardsorotherdevicesthatcarrytheCompany’sbrands.

Cross-bordervolumefeesarechargedtoissuersandacquirersbasedprimarilyonthedollarvolumeofactivityoncardsandotherdevices that carry theCompany’s brandswhere themerchant country and the countryof issuance aredifferent. Revenue fromcross-bordervolumeisrecordedasrevenueintheperioditisearned,whichiswhentherelatedvolumeisgeneratedonthecardsorotherdevicesthatcarrytheCompany’sbrands.

Transactionprocessing revenue is recognized forbothdomesticandcross-border transactions in theperiod inwhich the relatedtransactionsoccur.Transactionprocessingincludesthefollowing:

• Switchedtransactionrevenueisgeneratedfromthefollowingproductsandservices:

◦ Authorization is theprocessbywhicha transaction is routedto the issuer forapproval. Incertaincircumstances,suchaswhentheissuer’ssystemsareunavailableorcannotbecontacted,Mastercardorothersapprovesuchtransactionsonbehalfoftheissuerinaccordancewitheithertheissuer’sinstructionsorapplicablerules(alsoknownas“stand-in”).

◦ Clearing is the determination and exchange of financial transaction information between issuers and acquirers after atransactionhasbeensuccessfullyconductedatthepointofinteraction.TransactionsareclearedamongcustomersthroughMastercard’scentralandregionalprocessingsystems.

◦ Settlementisfacilitatingtheexchangeoffundsbetweenparties.

• Connectivity fees are charged to issuers, acquirers and other financial institutions for network access, equipment and thetransmissionofauthorizationandsettlementmessages.ThesefeesarebasedonthesizeofthedatabeingtransmittedandthenumberofconnectionstotheCompany’snetwork.

• Otherprocessing fees include issuerandacquirerprocessingsolutions;paymentgateways fore-commercemerchants;mobilegatewaysformobile-initiatedtransactions;andsafetyandsecurity.



Otherrevenuesconsistofvalue-addedproductsandservicesthataretypicallysoldwiththeCompany’spaymentserviceofferingsandare recognized in theperiod inwhich the related servicesareperformedor transactionsoccur. Other revenues include thefollowing:

• Dataanalyticsandconsultingfees.

• Cyber and intelligence fees are for products and servicesoffered toprevent, detect and respond to fraud and to ensure thesafetyoftransactionsmadeprimarilyonMastercardproducts.

• LoyaltyandrewardssolutionsfeesarechargedtoissuersforbenefitsprovideddirectlytoconsumerswithMastercard-brandedcards, such as access to a global airline lounge network, global and local concierge services, individual insurance coverages,emergencycardreplacement,emergencycashadvanceservicesanda24-hourcardholderservicecenter. Loyaltyandrewardsolutionfeesalsoincluderewardscampaignsandmanagementservices.

• Programmanagementservicesprovidedtoprepaidcardissuersconsistofforeignexchangemargin,commissions,loadfeesandATMwithdrawalfeespaidbycardholdersonthesaleandencashmentofprepaidcards.

• Batchandreal-timeaccount-basedpaymentservicesrelatingtoACHtransactionsandotherACHrelatedservices.

• Other payment-related products and services and platforms, including account and transaction enhancement services, openbankingsolutions,rulescomplianceandpublications.

Rebatesandincentives(contra-revenue)areprovidedtocustomersthatmeetcertainvolumetargetsandcanbeintheformofarebateorother support incentives,whichare tied toperformance. Rebatesand incentivesare recordedasa reductionof grossrevenueprimarilywhenvolume-andtransaction-basedrevenuesarerecognizedoverthecontractualterm.Inaddition,Mastercardmaymake incentivepayments to a customerdirectly related toentering intoanagreement,whichare generally capitalizedandamortizedoverthelifeoftheagreementonastraight-linebasis.

TheCompany’sdisaggregatednetrevenuebysourceandgeographicregionwereasfollowsfortheyearsendedDecember31:

2020 2019 2018

(inmillions)

Revenuebysource:

Domesticassessments $ 6,656 $ 6,781 $ 6,138

Cross-bordervolumefees 3,512 5,606 4,954

Transactionprocessing 8,731 8,469 7,391

Otherrevenues 4,717 4,124 3,348

Grossrevenue 23,616 24,980 21,831

Rebatesandincentives(contra-revenue) (8,315) (8,097) (6,881)

Netrevenue $ 15,301 $ 16,883 $ 14,950

Netrevenuebygeographicregion:

NorthAmericanMarkets $ 5,424 $ 5,843 $ 5,312

InternationalMarkets 9,701 10,869 9,514

Other1 176 171 124

Netrevenue $ 15,301 $ 16,883 $ 14,9501 Includesrevenuesmanagedbycorporatefunctions.

Receivables from contractswith customers of $2.5 billion and $2.3 billion as of December 31, 2020 and 2019, respectively, arerecordedwithin accounts receivable on the consolidated balance sheet. The Company’s customers are generallybilledweekly,however, the frequency isdependentupon thenatureof theperformanceobligationand theunderlyingcontractual terms. TheCompanydoesnottypicallyofferextendedpaymenttermstocustomers.

Contractassetsare included inprepaidexpensesandothercurrentassetsandotherassetson theconsolidatedbalancesheetatDecember 31, 2020 in the amounts of $59million and $245million, respectively. The comparable amounts included in prepaidexpensesandothercurrentassetsandotherassetsatDecember31,2019were$48millionand$152million,respectively.

DeferredrevenueisincludedinothercurrentliabilitiesandotherliabilitiesontheconsolidatedbalancesheetatDecember31,2020in theamountsof$355millionand$143million, respectively. The comparableamounts included inother current liabilitiesand



otherliabilitiesatDecember31,2019were$238millionand$106million,respectively.In2020,2019and2018revenuerecognizedfromthesatisfactionofsuchperformanceobligationswas$1.1billion,$994millionand$904million,respectively.

TheCompany’sremainingperformanceperiodsforitscontractswithcustomersforitspaymentnetworkservicesaretypicallylong-term in nature (generally up to 10 years). As a payment network service provider, the Company provides its customers withcontinuousaccesstoitsglobalpaymentsnetworkandstandsreadytoprovidetransactionprocessingandrelatedservicesoverthecontractualterm.ConsiderationisvariableastheCompanygeneratesvolume-andtransaction-basedrevenuesfromassessingitscustomers’ currentperiodactivity. TheCompanyhaselected theoptionalexemption tonotdisclose the remainingperformanceobligationsrelatedto itspaymentnetworkservices. TheCompanyalsoearnsrevenuesprimarilyfromothervalue-addedservicescomprised of both batch and real-time account-based payment services, consulting fees, gateway services, processing, loyaltyprograms and other payment-related products and services. At December 31, 2020, the estimated aggregate considerationallocated to unsatisfied performance obligations for these other value-added services is $1.3 billion, which is expected to berecognizedthrough2023. Theestimatedremainingperformanceobligationsrelatedtotheserevenuesaresubjecttochangeandareaffectedbyseveralfactors,includingmodificationsandterminationsandarenotexpectedtobematerialtoanyfutureannualperiod.

Note4.EarningsPerShare

ThecomponentsofbasicanddilutedEPSforcommonsharesforeachoftheyearsendedDecember31wereasfollows:

2020 2019 2018


Numerator

Netincome $ 6,411 $ 8,118 $ 5,859

Denominator

Basicweighted-averagesharesoutstanding 1,002 1,017 1,041

Dilutivestockoptionsandstockunits 4 5 6

Dilutedweighted-averagesharesoutstanding1 1,006 1,022 1,047

EarningsperShare

Basic $ 6.40 $ 7.98 $ 5.63

Diluted $ 6.37 $ 7.94 $ 5.60

Note:Tablemaynotsumduetorounding.1 Fortheyearspresented,thecalculationofdilutedEPSexcludedaminimalamountofanti-dilutiveshare-basedpaymentawards.

Note5.Cash,CashEquivalents,RestrictedCashandRestrictedCashEquivalents

Thefollowingtableprovidesareconciliationofcash,cashequivalents,restrictedcashandrestrictedcashequivalentsreportedontheconsolidatedbalancesheetthattotaltotheamountsshownontheconsolidatedstatementofcashflowsfortheyearsendedDecember31:

2020 2019

(inmillions)

Cashandcashequivalents $ 10,113 $ 6,988

Restrictedcashandrestrictedcashequivalents

Restrictedcashforlitigationsettlement 586 584

Restrictedsecuritydepositsheldforcustomers 1,696 1,370

Prepaidexpensesandothercurrentassets 24 27

Cash,cashequivalents,restrictedcashandrestrictedcashequivalents $ 12,419 $ 8,969



Note6.SupplementalCashFlows

ThefollowingtableincludessupplementalcashflowdisclosuresforeachoftheyearsendedDecember31:

2020 2019 2018

(inmillions)

Cashpaidforincometaxes,netofrefunds $ 1,349 $ 1,644 $ 1,790

Cashpaidforinterest 311 199 153

Cashpaidforlegalsettlements 149 668 260

Non-cashinvestingandfinancingactivities

Dividendsdeclaredbutnotyetpaid 439 403 340

Accruedproperty,equipmentandright-of-useassets 154 468 10

Fairvalueofassetsacquired,netofcashacquired 1,106 1,662 —

Fairvalueofliabilitiesassumedrelatedtoacquisitions 46 205 —

Note7.Investments

TheCompany’s investmentsontheconsolidatedbalancesheet includebothavailable-for-saleandheld-to-maturitysecurities(seeInvestments section below). The Company classifies its investments in equity securities of publicly traded and privately heldcompanieswithinotherassetsontheconsolidatedbalancesheet(seeEquityInvestmentssectionbelow).

Investments

InvestmentsontheconsolidatedbalancesheetconsistedofthefollowingatDecember31:

2020 2019

(inmillions)

Available-for-salesecurities $ 321 $ 591

Held-to-maturitysecurities 162 97

Totalinvestments $ 483 $ 688

Available-for-SaleSecurities

ThemajorclassesoftheCompany’savailable-for-saleinvestmentsecuritiesandtheirrespectiveamortizedcostbasisandfairvalueswereasfollows:

December31,2020 December31,2019

Amortized

Cost

GrossUnrealized

Gain

GrossUnrealized

Loss FairValueAmortized

Cost

GrossUnrealized

Gain

GrossUnrealized

Loss FairValue

(inmillions)

Municipalsecurities $ 10 $ — $ — $ 10 $ 15 $ — $ — $ 15Governmentandagencysecurities 64 — — 64 108 — — 108

Corporatesecurities 246 1 — 247 381 1 — 382

Asset-backedsecurities — — — — 85 1 — 86

Total $ 320 $ 1 $ — $ 321 $ 589 $ 2 $ — $ 591

TheCompany’savailable-for-saleinvestmentsecuritiesheldatDecember31,2020and2019,primarilycarriedacreditratingofA-orbetterwithunrealizedgainsandlossesrecordedasaseparatecomponentofothercomprehensiveincome(loss)ontheconsolidatedstatementofcomprehensiveincome.Themunicipalsecuritiesarecomprisedofstatetax-exemptbondsandarediversifiedacrossstatesandsectors. Governmentandagencysecurities includeU.S.governmentbonds,U.S.governmentsponsoredagencybondsandforeigngovernmentbonds. Corporatesecuritiesarecomprisedofcommercialpaperandcorporatebonds. Theasset-backedsecuritiesareinvestmentsinbondswhicharecollateralizedprimarilybyautomobileloanreceivables.



Thematurity distribution based on the contractual terms of the Company’s investment securities atDecember 31, 2020was asfollows:

Available-For-Sale

AmortizedCost FairValue

(inmillions)

Duewithin1year $ 115 $ 115

Dueafter1yearthrough5years 205 206

Total $ 320 $ 321

Investment incomeon the consolidated statementofoperationsprimarily consistsof interest incomegenerated fromcash, cashequivalents,timedeposits,andrealizedgainsandlossesontheCompany’sdebtsecurities.Therealizedgainsandlossesfromthesaleofavailable-for-salesecuritiesfor2020,2019and2018werenotsignificant.

Held-to-MaturitySecurities

TheCompanyclassifiestimedepositswithmaturitiesgreaterthanthreemonthsbutlessthanoneyearasheld-to-maturity. Timedepositsarecarriedatamortizedcostontheconsolidatedbalancesheetandare intendedtobehelduntilmaturity. Thecostofthesesecuritiesapproximatesfairvalue.

EquityInvestments

Included in other assets on the consolidated balance sheet are equity investments with readily determinable fair values(“Marketablesecurities”)andequityinvestmentswithoutreadilydeterminablefairvalues(“Nonmarketablesecurities”).Marketablesecurities are publicly traded companies and are measured using unadjusted quoted prices in their respective active markets.Nonmarketablesecuritiesthatdonotqualifyforequitymethodaccountingaremeasuredatcost,lessanyimpairmentandadjustedfor changes resulting fromobservable price changes in orderly transactions for the identical or similar investments of the sameissuer(“measurementalternative”).

ThefollowingtableisasummaryoftheactivityrelatedtotheCompany’sequityinvestments:

BalanceatDecember31,

2019Purchases(Sales),net

ChangesinFairValue1 Other2

BalanceatDecember31,

2020

(inmillions)

Marketablesecurities $ 479 $ 1 $ (5) $ 1 $ 476

Nonmarketablesecurities 435 204 35 22 696

Totalequityinvestments $ 914 $ 205 $ 30 $ 23 $ 1,1721 Recordedingains(losses)onequityinvestments,netontheconsolidatedstatementofoperations2 Includestranslationalimpactofcurrency

At December 31, 2020, the total carrying value of Nonmarketable securities included $157 million of measurement alternativeinvestments and$539millionof equitymethod investments. AtDecember 31, 2019, the total carrying valueofNonmarketablesecurities included $317 million of measurement alternative investments and $118 million of equity method investments.Cumulative impairments and downward fair value adjustments on measurement alternative investments were $14 million andcumulativeupwardfairvalueadjustmentswere$86millionasofDecember31,2020.

Note8.FairValueMeasurements

The Company classifies its fair value measurements of financial instruments into a three-level hierarchy within the ValuationHierarchy.Financialinstrumentsarecategorizedforfairvaluemeasurementpurposesasrecurringornon-recurringinnature.TherewerenotransfersmadeamongthethreelevelsintheValuationHierarchyfor2020and2019.



FinancialInstruments-RecurringMeasurements

ThedistributionoftheCompany’sfinancialinstrumentsmeasuredatfairvalueonarecurringbasiswithintheValuationHierarchywereasfollows:


QuotedPrices

inActiveMarkets(Level1)

SignificantOther

ObservableInputs(Level2)

SignificantUnobservable

Inputs(Level3) Total

QuotedPrices

inActiveMarkets(Level1)

SignificantOther



Inputs(Level3) Total

(inmillions)

Assets

Investmentsecuritiesavailableforsale1:

Municipalsecurities $ — $ 10 $ — $ 10 $ — $ 15 $ — $ 15

Governmentandagencysecurities 26 38 — 64 66 42 — 108

Corporatesecurities — 247 — 247 — 382 — 382

Asset-backedsecurities — — — — — 86 — 86

Derivativeinstruments2:

Foreignexchangecontracts — 19 — 19 — 12 — 12

Interestratecontracts — — — — — 14 — 14

Marketablesecurities3:

Equitysecurities 476 — — 476 479 — — 479

Deferredcompensationplan4:

Deferredcompensationassets 78 — — 78 67 — — 67

Liabilities

Derivativeinstruments2:

Foreignexchangederivativeliabilities $ — $ (28) $ — $ (28) $ — $ (32) $ — $ (32)

Deferredcompensationplan5:

Deferredcompensationliabilities (81) — — (81) (67) — — (67)

1 TheCompany’sU.S.governmentsecuritiesareclassifiedwithinLevel1of theValuationHierarchyas the fairvaluesarebasedonunadjustedquotedprices for identical assets in activemarkets. The fair valueof theCompany’s available-for-salemunicipal securities, governmentandagencysecurities,corporatesecuritiesandasset-backedsecuritiesarebasedonobservableinputssuchasquotedprices,benchmarkyieldsandissuerspreadsforsimilarassetsinactivemarketsandarethereforeincludedinLevel2oftheValuationHierarchy.

2 TheCompany’s foreignexchangeand interest ratederivativeassetand liabilitycontractshavebeenclassifiedwithinLevel2of theValuationHierarchyasthefairvalueisbasedonobservableinputssuchasbrokerquotesrelatingtoforeigncurrencyexchangeratesforsimilarderivativeinstruments.SeeNote23(DerivativeandHedgingInstruments)forfurtherdetails.

3 TheCompany’sMarketablesecuritiesarepubliclyheldandclassifiedwithinLevel1oftheValuationHierarchyasthefairvaluesarebasedonunadjustedquotedpricesintheirrespectiveactivemarkets.

4 TheCompanyhasanonqualifieddeferredcompensationplanwhereassetsareinvestedprimarilyinmutualfundsheldinarabbitrust,whichisrestricted forpayments toparticipantsof theplan. TheCompanyhaselectedtouse the fairvalueoption for thesemutual funds,whicharemeasuredusingquotedpricesofidenticalinstrumentsinactivemarketsandareincludedinprepaidexpensesandothercurrentassetsontheconsolidatedbalancesheet.

5 Thedeferredcompensationliabilitiesaremeasuredatfairvaluebasedonthequotedpricesofidenticalinstrumentstotheinvestmentvehiclesselectedbytheparticipants.Theseareincludedinotherliabilitiesontheconsolidatedbalancesheet.



FinancialInstruments-Non-RecurringMeasurements

NonmarketableSecurities

TheCompany’sNonmarketablesecuritiesarerecordedatfairvalueonanon-recurringbasisinperiodsafterinitialrecognitionunderthe equitymethodormeasurement alternativemethod. Nonmarketable securities are classifiedwithin Level 3 of theValuationHierarchyduetotheabsenceofquotedmarketprices,theinherentlackofliquidityandunobservableinputsusedtomeasurefairvaluethatrequiremanagement’sjudgment.TheCompanyusesdiscountedcashflowsandmarketassumptionstoestimatethefairvalue of its Nonmarketable securities when certain events or circumstances indicate that impairment may exist. See Note 7(Investments)forfurtherdetails.

Debt

TheCompanyestimates the fair valueof its long-termdebtbasedonmarketquotes. Thesedebt instruments arenot traded inactivemarketsandareclassifiedasLevel2oftheValuationHierarchy.AtDecember31,2020,thecarryingvalueandfairvalueoftotal long-termdebt (including the currentportion)was$12.7billionand$14.8billion, respectively. AtDecember31,2019, thecarryingvalueand fairvalueof long-termdebt (including thecurrentportion)was$8.5billionand$9.2billion, respectively. SeeNote15(Debt)forfurtherdetails.

OtherFinancialInstruments

Certainfinancialinstrumentsarecarriedontheconsolidatedbalancesheetatcostoramortizedcostbasis,whichapproximatesfairvalue due to their short-term, highly liquid nature. These instruments include cash and cash equivalents, restricted cash, timedeposits, accounts receivable, settlementdue fromcustomers, restricted securitydepositsheld for customers, accountspayable,settlementduetocustomersandotheraccruedliabilities.

Note9.PrepaidExpensesandOtherAssets

PrepaidexpensesandothercurrentassetsconsistedofthefollowingatDecember31:

2020 2019

(inmillions)

Customerandmerchantincentives $ 1,086 $ 872

Prepaidincometaxes 78 105

Other 719 786

Totalprepaidexpensesandothercurrentassets $ 1,883 $ 1,763

OtherassetsconsistedofthefollowingatDecember31:

2020 2019

(inmillions)

Customerandmerchantincentives $ 3,220 $ 2,838

Equityinvestments 1,172 914

Incometaxesreceivable 553 460

Other 420 313

Totalotherassets $ 5,365 $ 4,525

Customer and merchant incentives represent payments made to customers and merchants under business agreements. Costsdirectlyrelatedtoenteringintosuchanagreementaregenerallydeferredandamortizedoverthelifeoftheagreement.

SeeNote7(Investments)forfurtherinformationontheCompany’sequityinvestments.



Note10.Property,EquipmentandRight-of-UseAssets

Property,equipmentandright-of-useassetsconsistedofthefollowingatDecember31:

2020 2019

(inmillions)

Building,buildingequipmentandland $ 522 $ 505

Equipment 1,321 1,218

Furnitureandfixtures 99 92

Leaseholdimprovements 380 303

Operatingleaseright-of-useassets 970 810

Property,equipmentandright-of-useassets 3,292 2,928

Less:Accumulateddepreciationandamortization (1,390) (1,100)

Property,equipmentandright-of-useassets,net $ 1,902 $ 1,828

Depreciationandamortizationexpense for theaboveproperty,equipmentandright-of-useassetswas$400million,$336millionand$209millionfor2020,2019and2018,respectively.

Operating lease ROU assets and operating lease liabilities are recorded on the consolidated balance sheet as follows atDecember31:

2020 2019

(inmillions)

Balancesheetlocation

Property,equipmentandright-of-useassets,net $ 748 $ 711

Othercurrentliabilities 125 106

Otherliabilities 726 656

Operatingleaseamortizationexpensefor2020and2019was$123millionand$99million,respectively.AsofDecember31,2020and2019, theweighted-averageremaining lease termofoperating leaseswas9.1yearsand9.5yearsandtheweighted-averagediscountrateforoperatingleaseswas2.7%and2.9%,respectively.

ThefollowingtablesummarizesthematurityoftheCompany’soperatingleaseliabilitiesatDecember31,2020basedonleaseterm:

OperatingLeases

(inmillions)

2021 $ 137

2022 130

2023 108

2024 95

2025 72

Thereafter 383

Totaloperatingleasepayments 925

Less:Interest (74)

Presentvalueofoperatingleaseliabilities $ 851

Priortoadoptionoftheleaseaccountingstandardin2019,consolidatedrentalexpensefortheCompany’sleasedofficespacewas$94millionfor2018.Consolidatedleaseexpenseforautomobiles,computerequipmentandofficeequipmentwas$20millionfor2018,respectively.



Note11.Goodwill

ThechangesinthecarryingamountofgoodwillfortheyearsendedDecember31wereasfollows:

2020 2019

(inmillions)

Beginningbalance $ 4,021 $ 2,904

Additions 844 1,076

Foreigncurrencytranslation 95 41

Endingbalance $ 4,960 $ 4,021

The Company performed its annual qualitative assessment of goodwill during the fourth quarter of 2020 and determined aquantitative assessment was not necessary. The Company concluded that goodwill was not impaired and had no accumulatedimpairmentlossesatDecember31,2020.

Note12.OtherIntangibleAssets

Thefollowingtablesetsforthnetintangibleassets,otherthangoodwill,atDecember31:

2020 2019

GrossCarryingAmount

AccumulatedAmortization

NetCarryingAmount

GrossCarryingAmount

AccumulatedAmortization

NetCarryingAmount

(inmillions)

Finite-livedintangibleassets

Capitalizedsoftware $ 2,276 $ (1,126) $ 1,150 $ 1,884 $ (988) $ 896

Customerrelationships 743 (322) 421 621 (264) 357

Other 44 (41) 3 44 (44) —

Total 3,063 (1,489) 1,574 2,549 (1,296) 1,253

Indefinite-livedintangibleassets

Customerrelationships 179 — 179 164 — 164

Total $ 3,242 $ (1,489) $ 1,753 $ 2,713 $ (1,296) $ 1,417

The increase in thegrosscarryingamountofamortized intangibleassets in2020wasprimarily related tosoftwareadditionsandbusinesses acquired in 2020. SeeNote2 (Acquisitions) for furtherdetails. Certain intangible assets aredenominated in foreigncurrencies.Assuch,thechangeinintangibleassetsincludesacomponentattributabletoforeigncurrencytranslation.Basedonthequalitative assessment performed in 2020, it was determined that the Company’s indefinite-lived intangible assets were notimpaired.

Amortizationontheassetsaboveamountedto$303million,$285millionand$250million in2020,2019and2018,respectively.The following table sets forth the estimated future amortization expense on finite-lived intangible assets on the consolidatedbalancesheetatDecember31,2020fortheyearsendingDecember31:

(inmillions)

2021 $ 332

2022 260

2023 211

2024 194

2025andthereafter 577

$ 1,574



Note13.AccruedExpensesandAccruedLitigation

AccruedexpensesconsistedofthefollowingatDecember31:

2020 2019

(inmillions)

Customerandmerchantincentives $ 3,998 $ 3,892

Personnelcosts 727 713

Incomeandothertaxes 208 332

Other 497 552

Totalaccruedexpenses $ 5,430 $ 5,489

Customerandmerchant incentives representamounts tobepaid tocustomersunderbusinessagreements. AsofDecember31,2020 and 2019, the Company’s provision for litigationwas $842million and $914million, respectively. These amounts are notincludedintheaccruedexpensestableaboveandareseparatelyreportedasaccruedlitigationontheconsolidatedbalancesheet.SeeNote21(LegalandRegulatoryProceedings)foradditionalinformationregardingtheCompany’saccruedlitigation.

Note14.Pension,PostretirementandSavingsPlans

TheCompanyand certainof its subsidiariesmaintain variouspensionandotherpostretirementplans that cover substantially allemployeesworldwide.

DefinedContributionPlans

TheCompanysponsorsdefinedcontributionretirementplans. Theprimaryplan istheMastercardSavingsPlan,a401(k)planforsubstantiallyalloftheCompany’sU.S.employees,whichissubjecttotheprovisionsoftheEmployeeRetirementIncomeSecurityActof1974,asamended.Inaddition,theCompanyhasseveraldefinedcontributionplansoutsideoftheU.S.TheCompany’stotalexpenseforitsdefinedcontributionplanswas$150million,$127millionand$98millionin2020,2019and2018,respectively.

DefinedBenefitandOtherPostretirementPlans

TheCompanysponsorspensionandpostretirementplansforcertainnon-U.S.employees(the“non-U.S.Plans”)thatcovervariousbenefits specific to their countryofemployment. Additionally,Vocalinkhasadefinedbenefitpensionplan (the“VocalinkPlan”)whichwaspermanentlyclosedtonewentrantsandfutureaccrualsasofJuly21,2013,however,planparticipants’obligationsareadjustedforfuturesalarychanges.TheCompanyhasagreedtomakecontributionsof£15million(approximately$20millionasofDecember31,2020)annuallyuntilSeptember2022.Theterm“PensionPlans”includesthenon-U.S.PlansandtheVocalinkPlan.

TheCompanymaintainsapostretirementplanprovidinghealthcoverageandlifeinsurancebenefitsforsubstantiallyallof itsU.S.employeeshiredbeforeJuly1,2007(the“PostretirementPlan”).



TheCompanyusesaDecember31measurementdateforthePensionPlansanditsPostretirementPlan(collectivelythe“Plans”).TheCompanyrecognizesthefundedstatusofitsPlans,measuredasthedifferencebetweenthefairvalueoftheplanassetsandtheprojected benefit obligation, in the consolidated balance sheet. The following table sets forth the Plans’ funded status, keyassumptionsandamountsrecognizedintheCompany’sconsolidatedbalancesheetatDecember31:

PensionPlans PostretirementPlan

2020 2019 2020 2019

($inmillions)

Changeinbenefitobligation

Benefitobligationatbeginningofyear $ 531 $ 438 $ 64 $ 57

Servicecost 13 11 1 1

Interestcost 9 13 2 2

Actuarial(gain)loss 43 73 7 9

Benefitspaid (18) (15) (4) (5)

Transfersin 3 2 — —

Foreigncurrencytranslation 23 9 — —

Benefitobligationatendofyear 604 531 70 64

Changeinplanassets

Fairvalueofplanassetsatbeginningofyear 518 410 — —

Actual(loss)gainonplanassets 56 79 — —

Employercontributions 34 32 4 5

Benefitspaid (18) (15) (4) (5)

Transfersin 5 2 — —

Foreigncurrencytranslation 22 10 — —

Fairvalueofplanassetsatendofyear 617 518 — —

Fundedstatusatendofyear $ 13 $ (13) $ (70) $ (64)

Amountsrecognizedontheconsolidatedbalancesheetconsistof:

Noncurrentassets $ 28 $ — $ — $ —

Otherliabilities,short-term — — (4) (3)

Otherliabilities,long-term (15) (13) (66) (61)

$ 13 $ (13) $ (70) $ (64)

Accumulatedothercomprehensiveincomeconsistsof:

Netactuarial(gain)loss $ 12 $ 7 $ 9 $ 2

Priorservicecredit 1 1 (4) (5)

Balanceatendofyear $ 13 $ 8 $ 5 $ (3)

Weighted-averageassumptionsusedtodetermineendofyearbenefitobligations

Discountrate

Non-U.S.Plans 0.70% 0.70% * *

VocalinkPlan 1.55% 2.00% * *

PostretirementPlan * * 2.50% 3.25%

Rateofcompensationincrease

Non-U.S.Plans 1.50% 1.50% * *

VocalinkPlan 2.75% 2.50% * *

PostretirementPlan * * 3.00% 3.00%

*Notapplicable



AtDecember31,2020,theCompany’saggregatedPensionPlanassetsexceedthebenefitobligations.Forplanswherethebenefitobligationsexceededplanassets,theprojectedbenefitobligationwas$112million,theaccumulatedbenefitobligationwas$111millionandplanassetswere$97million.AtDecember31,2019,allofthePensionPlanshadbenefitobligationsinexcessofplanassets.InformationonthePensionPlanswereasfollowsasofDecember31:

2020 2019

(inmillions)

Projectedbenefitobligation $ 604 $ 531

Accumulatedbenefitobligation 601 524

Fairvalueofplanassets 617 518

FortheyearsendedDecember31,2020and2019,theCompany’sprojectedbenefitobligationrelatedtoitsPensionPlansincreased$73millionand$93million,respectively,primarilyattributabletoactuariallossesrelatedtolowerdiscountrateassumptions.

Components of net periodic benefit cost recorded in earnings were as follows for the Plans for each of the years endedDecember31:


2020 2019 2018 2020 2019 2018

(inmillions)

Servicecost $ 13 $ 11 $ 9 $ 1 $ 1 $ 1

Interestcost 9 13 12 2 2 2

Expectedreturnonplanassets (18) (18) (20) — — —

Amortizationofactuarialloss — 1 — — — —

Amortizationofpriorservicecredit — — — (1) (1) (2)

Netperiodicbenefitcost $ 4 $ 7 $ 1 $ 2 $ 2 $ 1

Theservicecostcomponentisrecognizedingeneralandadministrativeexpensesontheconsolidatedstatementofoperations.Netperiodicbenefitcost,excludingtheservicecostcomponent,isrecognizedinotherincome(expense)ontheconsolidatedstatementofoperations.

OtherchangesinplanassetsandbenefitobligationsrecognizedinothercomprehensiveincomefortheyearsendedDecember31wereasfollows:


2020 2019 2018 2020 2019 2018

(inmillions)

Currentyearactuarialloss(gain) $ 5 $ 12 $ 17 $ 7 $ 9 $ (2)

Currentyearpriorservicecredit — — 1 — — —

Amortizationofpriorservicecredit — — — 1 1 2

Totalothercomprehensiveloss(income) $ 5 $ 12 $ 18 $ 8 $ 10 $ —

Totalnetperiodicbenefitcostandothercomprehensiveloss(income) $ 9 $ 19 $ 19 $ 10 $ 12 $ 1



Assumptions

Weighted-averageassumptionsusedtodeterminenetperiodicbenefitcostwereasfollowsfortheyearsendedDecember31:


2020 2019 2018 2020 2019 2018

Discountrate

Non-U.S.Plans 0.70% 1.80% 1.80% * * *

VocalinkPlan 1.55% 2.00% 2.80% * * *

PostretirementPlan * * * 3.25% 4.25% 3.50%

Expectedreturnonplanassets

Non-U.S.Plans 1.60% 2.10% 3.00% * * *

VocalinkPlan 3.20% 3.75% 4.75% * * *

Rateofcompensationincrease

Non-U.S.Plans 1.50% 1.50% 2.60% * * *

VocalinkPlan 2.75% 2.50% 3.85% * * *

PostretirementPlan * * * 3.00% 3.00% 3.00%

*Notapplicable

TheCompany’sdiscountrateassumptionsarebasedonyieldcurvesderivedfromhighqualitycorporatebonds,whicharematchedtotheexpectedcashflowsofeachrespectiveplan.TheexpectedreturnonplanassetsassumptionsarederivedusingthecurrentandexpectedassetallocationsofthePensionPlans’assetsandconsideringhistoricalaswellasexpectedreturnsonvariousclassesof plan assets. The rates of compensation increases are determined by the Company, based upon its long-term plans for suchincreases.

ThefollowingadditionalassumptionswereusedatDecember31inaccountingforthePostretirementPlan:

2020 2019

Healthcarecosttrendrateassumedfornextyear 7.00% 6.00%

Ultimatetrendrate 5.00% 5.00%

Yearthattheratereachestheultimatetrendrate 8 2

Assets

Plan assets aremanaged taking into account the timing and amount of future benefit payments. The Vocalink Plan assets aremanagedwiththefollowingtargetassetallocations:fixedincome35%,U.K.governmentsecurities23%,equity22%,cashandcashequivalents12%andrealestate8%.Forthenon-U.S.Plans,theassetsareconcentratedprimarilyininsurancecontracts.

The Valuation Hierarchy of the Pension Plans’ assets is determined using a consistent application of the categorizationmeasurements for the Company’s financial instruments. SeeNote 1 (Summary of Significant Accounting Policies) for additionalinformation.



Thefollowingtablessetforthbylevel,withintheValuationHierarchy,thePensionPlans’assetsatfairvalue:


QuotedPricesinActiveMarkets(Level1)

SignificantOther



Inputs(Level3)

FairValue

QuotedPricesinActiveMarkets(Level1)

SignificantOther



Inputs(Level3)

FairValue

(inmillions)

Cashandcashequivalents1 $ 59 $ — $ — $ 59 $ 16 $ — $ — $ 16

Mutualfunds2 270 117 — 387 153 193 — 346

Insurancecontracts3 — 96 — 96 — 75 — 75

Total $ 329 $ 213 $ — $ 542 $ 169 $ 268 $ — $ 437

InvestmentsatNetAssetValue(“NAV”)4 75 81

TotalPlanAssets $ 617 $ 5181 Cashandcashequivalentsarevaluedatquotedmarketprices,whichrepresentthenetassetvalueofthesharesheldbythePlans.2 Certainmutualfundsarevaluedatquotedmarketprices,whichrepresentthevalueofthesharesheldbythePlans,andarethereforeincludedin

Level 1. Certain othermutual funds are valued at unit values provided by investmentmanagers, which are based on the fair value of theunderlying investments utilizing public information, independent external valuation from third-party services or third-party advisors, and arethereforeincludedinLevel2.

3 Insurancecontractsarevaluedatunitvaluesprovidedbyinvestmentmanagers,whicharebasedonthefairvalueoftheunderlyinginvestmentsutilizingpublicinformation,independentexternalvaluationfromthird-partyservicesorthird-partyadvisors.

4 InvestmentsatNAVincludemutualfunds(comprisedprimarilyofcreditinvestments)andotherinvestments(comprisedprimarilyofrealestateinvestments)andarevaluedusingthenetassetvalueprovidedbytheadministratorasapracticalexpedient,andthereforetheseinvestmentsarenotincludedinthevaluationhierarchy.Theseinvestmentshavequarterlyredemptionfrequencieswithredemptionnoticeperiodsrangingfrom60to90days.

Thefollowingtablesummarizesexpectedbenefitpayments(asofDecember31,2020)through2030forthePensionPlansandthePostretirementPlan, includingthosepaymentsexpectedtobepaidfromtheCompany’sgeneralassets.Actualbenefitpaymentsmaydifferfromexpectedbenefitpayments.


(inmillions)

2021 $ 19 $ 4

2022 12 4

2023 14 4

2024 15 4

2025 15 4

2026-2030 77 20



Note15.Debt

Long-termdebtconsistedofthefollowingatDecember31:

2020 2019Effective

InterestRate

(inmillions)

2020USDNotes 3.300% SeniorNotesdueMarch2027 $ 1,000 $ — 3.420%

3.350% SeniorNotesdueMarch2030 1,500 — 3.430%

3.850% SeniorNotesdueMarch2050 1,500 — 3.896%

2019USDNotes 2.950% SeniorNotesdueJune2029 1,000 1,000 3.030%

3.650% SeniorNotesdueJune2049 1,000 1,000 3.689%

2.000% SeniorNotesdueMarch2025 750 750 2.147%

2018USDNotes 3.500% SeniorNotesdueFebruary2028 500 500 3.598%

3.950% SeniorNotesdueFebruary2048 500 500 3.990%

2016USDNotes 2.000% SeniorNotesdueNovember2021 650 650 2.236%

2.950% SeniorNotesdueNovember2026 750 750 3.044%

3.800% SeniorNotesdueNovember2046 600 600 3.893%

2015EURNotes1 1.100% SeniorNotesdueDecember2022 859 785 1.265%

2.100% SeniorNotesdueDecember2027 982 896 2.189%

2.500% SeniorNotesdueDecember2030 184 169 2.562%

2014USDNotes 3.375% SeniorNotesdueApril2024 1,000 1,000 3.484%

12,775 8,600

Less:Unamortizeddiscountanddebtissuancecosts (103) (73)

Totaldebtoutstanding 12,672 8,527

Less:Currentportion2 (649) —

Long-termdebt $ 12,023 $ 8,527

1 Relatestoeuro-denominateddebtissuanceof€1.650billioninDecember20152 Relatestocurrentportionofthe2016USDNotes,dueinNovember2021,classifiedascurrentportionof long-termdebtontheconsolidated

balancesheet

InMarch2020,theCompanyissued$1billionprincipalamountofnotesdueMarch2027,$1.5billionprincipalamountofnotesdueMarch2030and$1.5billionprincipalamountnotesdueMarch2050(collectivelythe“2020USDNotes”).Thenetproceedsfromtheissuance of the 2020USDNotes, after deducting the original issue discount, underwriting discount and offering expenses,were$3.959billion.

InMay2019,theCompanyissued$1billionprincipalamountofnotesdueJune2029and$1billionprincipalamountofnotesdueJune2049and inDecember2019, theCompany issued$750millionprincipal amountofnotesdueMarch2025 (collectively the“2019 USD Notes”). The net proceeds from the issuance of the 2019 USD Notes, after deducting the original issue discount,underwritingdiscountandofferingexpenses,were$2.724billion.

Thenetproceeds,afterdeductingtheoriginalissuediscount,underwritingdiscountandofferingexpenses,fromtheissuanceofthe2018USDNoteswere$991million.



Theoutstandingdebt,describedabove,isnotsubjecttoanyfinancialcovenantsanditmayberedeemedinwhole,orinpart,attheCompany’soptionatanytimeforaspecifiedmake-wholeamount. Thesenotesareseniorunsecuredobligationsandwouldrankequally with any future unsecured and unsubordinated indebtedness. The proceeds of the notes are to be used for generalcorporatepurposes.

Scheduledannualmaturitiesoftheprincipalportionoflong-termdebtoutstandingatDecember31,2020aresummarizedbelow.

(inmillions)

2021 $ 650

2022 859

2023 —

2024 1,000

2025 750

Thereafter 9,516

Total $ 12,775

OnNovember14,2019,theCompanyincreaseditscommercialpaperprogram(the“CommercialPaperProgram”)from$4.5billionto$6billionunderwhichtheCompanyisauthorizedtoissueunsecuredcommercialpapernoteswithmaturitiesofupto397daysfromthedateofissuance.TheCommercialPaperProgramisavailableinU.S.dollars.

InconjunctionwiththeCommercialPaperProgram,theCompanyenteredintoacommittedfive-yearunsecured$6billionrevolvingcreditfacility(the“CreditFacility”)onNovember14,2019.TheCreditFacility,whichpreviouslyexpiredonNovember14,2024,wasextendedonNovember14,2020 foranadditionalyearandnowexpiresonNovember13,2025. Theextensiondidnot result inmaterialchangestothetermsandconditionsoftheCreditFacility.BorrowingsundertheCreditFacilityareavailableinU.S.dollarsand/oreuros.ThefacilityfeeundertheCreditFacilityisdeterminedaccordingtotheCompany’screditratingandispayableontheaveragedailycommitment,regardlessofusage,perannum.Inadditiontothefacilityfee,interestratesonborrowingsundertheCreditFacilitywouldbebasedonprevailingmarket interest ratesplusapplicablemargins that fluctuatebasedontheCompany’scredit rating. The Credit Facility contains customary representations, warranties, affirmative and negative covenants, events ofdefaultand indemnificationprovisions. TheCompanywas incompliance inallmaterialrespectswiththecovenantsoftheCreditFacilityatDecember31,2020and2019.

Borrowings under the Commercial Paper Program and the Credit Facility are used to provide liquidity for general corporatepurposes,includingprovidingliquidityintheeventofoneormoresettlementfailuresbytheCompany’scustomers.TheCompanymayborrowandrepayamountsundertheCommercialPaperProgramandCreditFacilityfromtimetotime.TheCompanyhadnoborrowingsundertheCreditFacilityandtheCommercialPaperProgramatDecember31,2020and2019.

Note16.Stockholders'Equity

ClassesofCapitalStock

Mastercard’samendedandrestatedcertificateofincorporationauthorizesthefollowingclassesofcapitalstock:

ClassParValuePerShare

AuthorizedShares

(inmillions) DividendandVotingRights

A $0.0001 3,000 OnevotepershareDividendrights

B $0.0001 1,200 Non-votingDividendrights

Preferred $0.0001 300 NosharesissuedoroutstandingatDecember31,2020and2019.DividendandvotingrightsaretobedeterminedbytheBoardofDirectorsoftheCompanyuponissuance.



Dividends

TheCompanydeclaredaquarterlycashdividendonitsClassAandClassBCommonStockduringeachofthefourquartersof2020,2019and2018.

TheCompanydeclaredtotalpersharedividendsonitsClassAandClassBCommonStockduringtheyearsendedDecember31assummarizedbelow:

2020 2019 2018


Dividendsdeclaredpershare $ 1.64 $ 1.39 $ 1.08

Totaldividendsdeclared $ 1,641 $ 1,408 $ 1,120

OwnershipandGovernanceStructure

EquityownershipandvotingpoweroftheCompany’sshareswereallocatedasfollowsasofDecember31:

2020 2019

EquityOwnership

GeneralVotingPower

EquityOwnership

GeneralVotingPower

PublicInvestors(ClassAstockholders) 88.2% 88.9% 87.8% 88.8%PrincipalorAffiliateCustomers(ClassBstockholders) 0.8% —% 1.1% —%MastercardFoundation(ClassAstockholders) 11.0% 11.1% 11.1% 11.2%

ClassBCommonStockConversions

SharesofClassBcommonstockareconvertibleonaone-for-onebasisintosharesofClassAcommonstock.EntitieseligibletoholdMastercard’sClassBcommonstockaredefinedintheCompany’samendedandrestatedcertificateofincorporation(generallytheCompany’sprincipaloraffiliatecustomers),andtheyarerestricted fromretainingownershipofsharesofClassAcommonstock.ClassBstockholdersarerequiredtosubsequentlysellorotherwisetransferanysharesofClassAcommonstockreceivedpursuanttosuchaconversion.

MastercardFoundation

Inconnectionandsimultaneouslywithits2006initialpublicoffering(the“IPO”),theCompanyissuedanddonated135millionnewlyauthorizedsharesofClassAcommonstocktoMastercardFoundation. MastercardFoundation isaprivatecharitable foundationincorporatedinCanadathatiscontrolledbydirectorswhoareindependentoftheCompanyanditsprincipalcustomers.Underthetermsof thedonation,MastercardFoundationbecameable toresell thedonatedshares inMay2010totheextentnecessary tomeetcharitabledisbursementrequirementspursuanttoCanadiantax law. Undersuchcurrent law,MastercardFoundationmustannuallydisburseat least3.5%of its assetsnotused in its charitableactivitiesandadministration in thepreviouseightquarters(“Disbursement Quota”). However, Mastercard Foundation obtained permission from the Canada Revenue Agency to, untilDecember 31, 2021,meet its cumulative DisbursementQuota obligations over a period of time that, on average, demonstratescompliance with the requirement for such established time period. Mastercard Foundation will be permitted to sell all of itsremainingsharesbeginningMay1,2027,subjecttocertainconditions.

StockRepurchasePrograms

TheCompany’sBoardofDirectorshaveapprovedsharerepurchaseprogramsauthorizingtheCompanytorepurchasesharesofitsClass A Common Stock. These programs become effective after the completion of the previously authorized share repurchaseprogram.



ThefollowingtablesummarizestheCompany’ssharerepurchaseauthorizationsofitsClassAcommonstockthroughDecember31,2020,aswellashistoricalpurchases:

BoardauthorizationdatesDecember

2020December

2019December

2018December

2017December

2016

DateprogrambecameeffectiveNotyeteffective

January2020

January2019

March2018 April2017 Total

(inmillions,exceptaveragepricedata)

Boardauthorization $ 6,000 $ 8,000 $ 6,500 $ 4,000 $ 4,000 $ 28,500

Dollar-valueofsharesrepurchasedin2018 $ — $ — $ — $ 3,699 $ 1,234 $ 4,933

RemainingauthorizationatDecember31,2018 $ — $ — $ 6,500 $ 301 $ — $ 6,801

Dollar-valueofsharesrepurchasedin2019 $ — $ — $ 6,196 $ 301 $ — $ 6,497

RemainingauthorizationatDecember31,2019 $ — $ 8,000 $ 304 $ — $ — $ 8,304

Dollar-valueofsharesrepurchasedin2020 $ — $ 4,169 $ 304 $ — $ — $ 4,473

RemainingauthorizationatDecember31,2020 $ 6,000 $ 3,831 $ — $ — $ — $ 9,831

Sharesrepurchasedin2018 — — — 19.0 7.2 26.2

Averagepricepaidpersharein2018 $ — $ — $ — $ 194.77 $ 171.11 $ 188.26

Sharesrepurchasedin2019 — — 24.8 1.6 — 26.4

Averagepricepaidpersharein2019 $ — $ — $ 249.58 $ 188.38 $ — $ 245.89

Sharesrepurchasedin2020 — 13.3 1.0 — — 14.3

Averagepricepaidpersharein2020 $ — $ 313.26 $ 304.89 $ — $ — $ 312.68CumulativesharesrepurchasedthroughDecember31,2020 — 13.3 25.8 20.6 28.2 87.9

Cumulativeaveragepricepaidpershare $ — $ 313.26 $ 251.72 $ 194.27 $ 141.99 $ 212.41

The following table presents the changes in the Company’s outstanding Class A and Class B common stock for the years endedDecember31:

OutstandingShares

ClassA ClassB

(inmillions)

BalanceatDecember31,2017 1,039.7 14.1

Purchasesoftreasurystock (26.2) —

Share-basedpayments 2.8 —

ConversionofClassBtoClassAcommonstock 2.3 (2.3)

BalanceatDecember31,2018 1,018.6 11.8




BalanceatDecember31,2019 996.0 11.2




BalanceatDecember31,2020 986.9 8.3



Note17.AccumulatedOtherComprehensiveIncome(Loss)

Thechangesinthebalancesofeachcomponentofaccumulatedothercomprehensiveincome(loss),netoftax,fortheyearsendedDecember31,2020and2019wereasfollows:

December31,2019

Increase/(Decrease) Reclassifications

December31,2020

(inmillions)

Foreigncurrencytranslationadjustments1 $ (638) $ 286 $ — $ (352)

Translationadjustmentsonnetinvestmenthedge2 (38) (137) — (175)

Cashflowhedges

Interestratecontracts3 11 (147) 3 (133)

Definedbenefitpensionandotherpostretirementplans4 (9) (10) (1) (20)

Investmentsecuritiesavailable-for-sale 1 (1) — —

AccumulatedOtherComprehensiveIncome(Loss) $ (673) $ (9) $ 2 $ (680)

December31,2018

Increase/(Decrease) Reclassifications

December31,2019

(inmillions)

Foreigncurrencytranslationadjustments1 $ (661) $ 23 $ — $ (638)

Translationadjustmentsonnetinvestmenthedge2 (66) 28 — (38)

Cashflowhedges

Interestratecontracts3 — 11 — 11

Definedbenefitpensionandotherpostretirementplans4 10 (17) (2) (9)

Investmentsecuritiesavailable-for-sale (1) 2 — 1

AccumulatedOtherComprehensiveIncome(Loss) $ (718) $ 47 $ (2) $ (673)

1. During2020,thedecreaseintheaccumulatedothercomprehensivelossrelatedtoforeigncurrencytranslationadjustmentswasdrivenprimarilyby theappreciationof theEuroandBritishpoundpartiallyoffsetby thedepreciationof theBrazilian real. During2019, thedecrease in theaccumulatedothercomprehensivelossrelatedtoforeigncurrencytranslationadjustmentswasdrivenprimarilybytheappreciationoftheBritishpoundpartiallyoffsetbythedepreciationoftheeuro.

2. TheCompanyusesforeigncurrencydenominateddebttohedgeaportionofitsnetinvestmentinforeignoperationsagainstadversemovementsinexchangerates.Changesinthevalueofthedebtarerecordedinaccumulatedothercomprehensiveincome(loss).During2020,theincreaseintheaccumulatedothercomprehensivelossrelatedtothenetinvestmenthedgewasdrivenbytheappreciationoftheeuro.During2019,thedecrease intheaccumulatedothercomprehensive lossrelatedtothenet investmenthedgewasdrivenbythedepreciationoftheeuro. SeeNote23(DerivativeandHedgingInstruments)foradditionalinformation.

3. In2019,theCompanyenteredintotreasuryratelockswhichareaccountedforascashflowhedges.Inthefirstquarterof2020,inconnectionwith the issuance of the 2020 USD Notes, these contracts were settled for a loss of $175 million, or $136 million net of tax, recorded inaccumulated other comprehensive income (loss). The cumulative loss will be reclassified as an adjustment to interest expense over therespectivetermsofthe2020USDNotes.SeeNote23(DerivativeandHedgingInstruments)foradditionalinformation.

4. During2020,theincreaseintheaccumulatedothercomprehensivelossrelatedtotheCompany’sPlanswasdrivenprimarilybyanactuariallosswithinthePostretirementPlan.During2019, thedecrease intheaccumulatedothercomprehensivegainrelatedtotheCompany’sPlanswasprimarily driven by actuarial losses within the Vocalink and non-U.S. Plans. See Note 14 (Pension, Postretirement and Savings Plans) foradditionalinformation.

Note18.Share-BasedPayments

InMay2006, theCompany implemented theMastercard Incorporated2006 LongTerm IncentivePlan,whichwas amendedandrestatedasofJune5,2012(the“LTIP”).TheLTIPisastockholder-approvedplanthatpermitsthegrantofvarioustypesofequityawards to employees. The Company has grantedOptions, RSUs and PSUs under the LTIP. The Company uses the straight-linemethod of attribution for expensing all equity awards. Compensation expense is recorded net of estimated forfeitures, withestimatesadjustedasappropriate.



Thereareapproximately116millionsharesofClassAcommonstockauthorizedforequityawardsundertheLTIP.AlthoughtheLTIPpermitstheissuanceofsharesofClassBcommonstock,nosuchshareshavebeenauthorizedforissuance.SharesissuedasaresultofOptionexercisesandtheconversionsofRSUsandPSUswerefundedprimarilywiththeissuanceofnewsharesofClassAcommonstock.

StockOptions

Options expire ten years from thedateof grant and vest ratablyover four years. ForOptions granted, a participant’s unvestedawardsareforfeitedupontermination.Intheeventaparticipantterminatesemploymentduetodisabilityorretirementmorethansevenmonthsafterreceivingtheaward,however,theparticipantretainsalloftheirawardswithoutprovidingadditionalservicetothe Company. Retirement eligibility is dependent upon age and years of service. Compensation expense is recognized over thevestingperiodasstatedintheLTIP.

The fair valueof eachOption is estimatedon thedateof grant using aBlack-Scholes optionpricingmodel. The following tablepresentstheweighted-averageassumptionsusedinthevaluationandtheresultingweighted-averagefairvalueperoptiongrantedfortheyearsendedDecember31:

2020 2019 2018

Risk-freerateofreturn 1.0% 2.6% 2.7%

Expectedterm(inyears) 6.00 6.00 6.00

Expectedvolatility 19.3% 19.6% 19.7%

Expecteddividendyield 0.6% 0.6% 0.6%

Weighted-averagefairvalueperOptiongranted $ 80.92 $ 53.09 $ 40.90

Therisk-freerateofreturnwasbasedontheU.S.Treasuryyieldcurveineffectonthedateofgrant. TheexpectedtermandtheexpectedvolatilitywerebasedonhistoricalMastercard information. TheexpecteddividendyieldswerebasedontheCompany’sexpectedannualdividendrateonthedateofgrant.

ThefollowingtablesummarizestheCompany’soptionactivityfortheyearendedDecember31,2020:

Options

Weighted-AverageExercisePrice

Weighted-AverageRemainingContractual

Term

AggregateIntrinsicValue

(inmillions) (inyears) (inmillions)

OutstandingatJanuary1,2020 6.6 $ 117

Granted 0.4 $ 263

Exercised (1.3) $ 75

Forfeited/expired — $ 229

OutstandingatDecember31,2020 5.7 $ 137 6.0 $ 1,259

ExercisableatDecember31,2020 3.8 $ 106 5.1 $ 962

OptionsvestedandexpectedtovestatDecember31,2020 5.7 $ 137 6.0 $ 1,257

AsofDecember31,2020,therewas$37millionoftotalunrecognizedcompensationcostrelatedtonon-vestedOptions.Thecostisexpectedtoberecognizedoveraweighted-averageperiodof2.1years.

RestrictedStockUnits

ForRSUsgrantedonorafterMarch1,2020,theawardsgenerallyvestratablyoverfouryears.ForRSUsgrantedbeforeMarch1,2020,theawardsgenerallyvestafterthreeyears.Aparticipant’sunvestedawardsareforfeiteduponterminationofemployment.Intheeventofterminationduetojobelimination(asdefinedbytheCompany),however,aparticipantwillretainapro-rataportionoftheunvestedawardsforservicesperformedthroughthedateoftermination.Intheeventaparticipantterminatesemploymentduetodisabilityorretirementmorethansevenmonthsafterreceivingtheaward,theparticipantretainsalloftheirawardswithoutprovidingadditionalservicetotheCompany.CompensationexpenseisrecognizedovertheshorterofthevestingperiodsstatedintheLTIPorthedatetheindividualbecomeseligibletoretirebutnotlessthansevenmonths.



ThefollowingtablesummarizestheCompany’sRSUactivityfortheyearendedDecember31,2020:

Units

Weighted-Average

Grant-DateFairValue


(inmillions) (inmillions)


Granted 0.9 $ 288

Converted (1.2) $ 116

Forfeited (0.1) $ 218

OutstandingatDecember31,2020 2.5 $ 231 $ 898

RSUsexpectedtovestatDecember31,2020 2.4 $ 230 $ 861

ThefairvalueofeachRSUistheclosingstockpriceontheNewYorkStockExchangeoftheCompany’sClassAcommonstockonthedateofgrant,adjusted for theexclusionofdividendequivalents. Uponvesting,aportionof theRSUawardmaybewithheld tosatisfytheminimumstatutorywithholdingtaxes. TheremainingRSUswillbesettledinsharesoftheCompany’sClassAcommonstockafterthevestingperiod.AsofDecember31,2020,therewas$233millionoftotalunrecognizedcompensationcostrelatedtonon-vestedRSUs.Thecostisexpectedtoberecognizedoveraweighted-averageperiodof2.4years.

PerformanceStockUnits

PSUsvestafterthreeyears,however,awardsgrantedonorafterMarch1,2019aresubjecttoamandatoryone-yearpost-vesthold.Aparticipant’sunvestedawardsareforfeiteduponterminationofemployment.Intheeventofterminationduetojobelimination(asdefinedbytheCompany),however,aparticipantwillretainapro-rataportionoftheunvestedawardsforservicesperformedthroughthedateoftermination.Intheeventaparticipantterminatesemploymentduetodisabilityorretirementmorethansevenmonthsafterreceivingtheaward,theparticipantretainsalloftheirawardswithoutprovidingadditionalservicetotheCompany.

ThefollowingtablesummarizestheCompany’sPSUactivityfortheyearendedDecember31,2020:

Units

Weighted-Average

Grant-DateFairValue


(inmillions) (inmillions)


Granted 0.2 $ 291

Converted (0.3) $ 126

OutstandingatDecember31,2020 0.4 $ 259 $ 148

PSUsexpectedtovestatDecember31,2020 0.4 $ 259 $ 148

Since2013,PSUscontainingperformanceandmarketconditionshavebeenissued.Performancemeasuresusedtodeterminetheactualnumberofsharesthatvestafterthreeyears includenetrevenuegrowth,EPSgrowthandrelativetotalshareholderreturn(“TSR”).RelativeTSRisconsideredamarketcondition,whilenetrevenueandEPSgrowthareconsideredperformanceconditions.TheMonteCarlosimulationvaluationmodelisusedtodeterminethegrant-datefairvalue.

CompensationexpenseforPSUsisrecognizedovertherequisiteserviceperiod,orthedatetheindividualbecomeseligibletoretirebut not less than sevenmonths, if it is probable that the performance targetwill be achieved and subsequently adjusted if theprobabilityassessmentchanges.DuringtheyearendedDecember31,2020,performancetargetsrelatedtoPSUawardsgrantedin2018, and scheduled to vest in 2021 (“2018 PSUAwards”),were adjusted to exclude certain pandemic-related financial impactsdeemedoutsideoftheCompany’scontrol.TheadjustmentrequiredtheCompanytoapplymodificationaccountingtothe2018PSUAwards. The modification had an immaterial impact on compensation expense expected to be recognized over the remainingserviceperiod. AsofDecember31, 2020, therewas$38millionof total unrecognized compensation cost related tonon-vestedPSUs.Thecostisexpectedtoberecognizedoveraweighted-averageperiodof1.4years.



AdditionalInformation

Thefollowingtableincludesadditionalshare-basedpaymentinformationforeachoftheyearsendedDecember31:

2020 2019 2018

(inmillions,exceptweighted-averagefairvalue)

Share-basedcompensationexpense:Options,RSUsandPSUs $ 254 $ 250 $ 196

Incometaxbenefitrecognizedforequityawards 53 53 41

IncometaxbenefitrealizedrelatedtoOptionsexercised 68 69 53

Options:

TotalintrinsicvalueofOptionsexercised 317 317 242

RSUs:

Weighted-averagegrant-datefairvalueofawardsgranted 288 226 171

TotalintrinsicvalueofRSUsconvertedintosharesofClassAcommonstock 330 394 194

PSUs:

Weighted-averagegrant-datefairvalueofawardsgranted 291 231 226

TotalintrinsicvalueofPSUsconvertedintosharesofClassAcommonstock 92 85 40

Note19.Commitments

AtDecember31,2020,theCompanyhadthefollowingfutureminimumpaymentsdueundernoncancelableagreements,primarilyrelatedtosponsorshipstopromotetheMastercardbrandandlicensingarrangementsandacommitmenttopurchasetheremainingsharesofamajority-ownedjointventure.TheCompanyhasaccrued$22millionofthesefuturepaymentsasofDecember31,2020.

(inmillions)

2021 $ 573

2022 255

2023 117

2024 78

2025 1

Thereafter —

Total $ 1,024

Note20.IncomeTaxes

ComponentsofIncomeandIncometaxexpense

ThedomesticandforeigncomponentsofincomebeforeincometaxesfortheyearsendedDecember31areasfollows:

2020 2019 2018

(inmillions)

UnitedStates $ 3,304 $ 4,213 $ 3,510

Foreign 4,456 5,518 3,694

Incomebeforeincometaxes $ 7,760 $ 9,731 $ 7,204



ThetotalincometaxprovisionfortheyearsendedDecember31iscomprisedofthefollowingcomponents:

2020 2019 2018

(inmillions)

CurrentFederal $ 439 $ 642 $ 649Stateandlocal 56 81 69Foreign 781 897 871

1,276 1,620 1,589

DeferredFederal 106 40 (228)Stateandlocal 9 — (11)Foreign (42) (47) (5)

73 (7) (244)

Incometaxexpense $ 1,349 $ 1,613 $ 1,345

EffectiveIncomeTaxRate

AreconciliationoftheeffectiveincometaxratetotheU.S.federalstatutoryincometaxratefortheyearsendedDecember31,isasfollows:

2020 2019 2018

Amount Percent Amount Percent Amount Percent(inmillions,exceptpercentages)

Incomebeforeincometaxes $ 7,760 $ 9,731 $ 7,204

Federalstatutorytax 1,630 21.0% 2,044 21.0% 1,513 21.0%

Statetaxeffect,netoffederalbenefit 57 0.7% 65 0.7% 46 0.6%

Foreigntaxeffect (193) (2.5)% (208) (2.1)% (92) (1.3)%

EuropeanCommissionfine — —% — —% 194 2.7%

Foreigntaxcredits1 — —% (32) (0.3)% (110) (1.5)%

Windfallbenefit (119) (1.5)% (129) (1.3)% (72) (1.0)%

Other,net (26) (0.3)% (127) (1.4)% (134) (1.8)%

Incometaxexpense $ 1,349 17.4% $ 1,613 16.6% $ 1,345 18.7%

1 Includedwithintheimpactoftheforeigntaxcreditsis$27millionfor2019and$90millionfor2018oftaxbenefitsrelatingtothecarrybackofcertainforeigntaxcredits.

TheeffectiveincometaxratesfortheyearsendedDecember31,2020,2019and2018were17.4%,16.6%and18.7%,respectively.Theeffectiveincometaxratefor2020washigherthantheeffectiveincometaxratefor2019,primarilyduetodiscretetaxbenefitsin 2019, partially offset by a more favorable geographic mix of earnings in 2020. The 2019 discrete tax benefits related to afavorablecourtruling,areductiontotheCompany’stransitiontax liabilityandadditional foreigntaxcreditswhichcanbecarriedbackunderU.S.taxreformtransitionrulesissuedbytheDepartmentoftheTreasuryandtheInternalRevenueService.

Theeffective incometaxrate for2019was lowerthantheeffective incometaxrate for2018primarilyduetothenondeductiblenatureofthefineissuedbytheEuropeanCommissionin2018andadiscretetaxbenefitrelatedtoafavorablecourtrulingin2019.These2019benefitswerepartiallyoffsetbydiscretetaxbenefitsin2018primarilyrelatedtoforeigntaxcreditsgeneratedin2018asaresultofU.S.taxreform,whichcanbecarriedbackandutilized in2017undertransitionrules issuedbytheDepartmentoftheTreasuryandtheInternalRevenueService.



SingaporeIncomeTaxRate

In connectionwith theexpansionof theCompany’soperations in theAsiaPacific,MiddleEast andAfrica region, theCompany’ssubsidiary in Singapore,Mastercard Asia Pacific Pte. Ltd. (“MAPPL”) received an incentive grant from the SingaporeMinistry ofFinancein2010.TheincentivehadprovidedMAPPLwith,amongotherbenefits,areducedincometaxrateforthe10-yearperiodcommencing January 1, 2010 on taxable income in excess of a base amount. The Company continued to explore businessopportunitiesinthisregion,resultinginanexpansionoftheincentivesbeinggrantedbytheMinistryofFinance,includingafurtherreduction to the income tax rate on taxable income in excess of a revised fixed base amount commencing July 1, 2011 andcontinuingthroughDecember31,2025.Withouttheincentivegrant,MAPPLwouldhavebeensubjecttothestatutoryincometaxrateonitsearnings.For2020,2019and2018,theimpactoftheincentivegrantreceivedfromtheMinistryofFinanceresultedinareductionofMAPPL’sincometaxliabilityof$260million,or$0.26perdilutedshare,$300million,or$0.29perdilutedshare,and$212million,or$0.20perdilutedshare,respectively.

IndefiniteReinvestment

AsofDecember31,2020theCompanyhaddeferredtaxliabilitiesof$61millionprimarilyrelatedtothetaxeffectoftheestimatedforeign exchange impact on unremitted earnings. The Company expects that foreign withholding taxes associated with futurerepatriationoftheseearningswillnotbematerial. Earningsofapproximately$0.6billionremainpermanentlyreinvestedandtheCompany estimates that immaterial U.S. federal and state and local income tax expense would result, primarily from foreignexchange,iftheseearningsweretoberepatriated.

DeferredTaxes

Deferredtaxassetsand liabilitiesrepresenttheexpectedfuturetaxconsequencesoftemporarydifferencesbetweenthecarryingamountsand the taxbasisof assetsand liabilities. The componentsofdeferred taxassetsand liabilitiesatDecember31areasfollows:

2020 2019

(inmillions)

DeferredTaxAssets

Accruedliabilities $ 324 $ 354

Compensationandbenefits 218 214

Statetaxesandothercredits 47 41

Netoperatingandcapitallosses 147 119

Unrealizedgain/loss-2015EURNotes 58 20

U.S.foreigntaxcredits 276 145

Intangibleassets 182 157

Otheritems 142 74

Less:Valuationallowance (353) (205)

TotalDeferredTaxAssets 1,041 919

DeferredTaxLiabilities

Prepaidexpensesandotheraccruals 78 83

Goodwillandintangibleassets 216 187

Property,plantandequipment 183 128

Previouslytaxedearningsandprofits 61 —

Otheritems 98 63

TotalDeferredTaxLiabilities 636 461

NetDeferredTaxAssets $ 405 $ 458

ThevaluationallowancebalanceatDecember31,2020and2019primarilyrelatestotheCompany’sabilitytorecognizefuturetaxbenefitsassociatedwiththecarryforwardofU.S.foreigntaxcreditsgeneratedinthecurrentandpriorperiodsandcertainforeignnetoperatinglosses.Therecognitionoftheforeigntaxcreditsisdependentupontherealizationoffutureforeignsourceincomeintheappropriate foreigntaxcreditbasket inaccordancewithU.S. federal incometax law. Therecognitionof theforeign losses is



dependentupon the future taxable income in such jurisdictions and the ability under tax law in these jurisdictions toutilizenetoperatinglossesfollowingachangeincontrol.

AreconciliationofthebeginningandendingbalancefortheCompany’sunrecognizedtaxbenefitsfortheyearsendedDecember31,isasfollows:

2020 2019 2018

(inmillions)

Beginningbalance $ 203 $ 164 $ 183

Additions:

Currentyeartaxpositions 19 22 23

Prioryeartaxpositions 192 37 5

Reductions:

Prioryeartaxpositions (10) (11) (17)

Settlementswithtaxauthorities (12) (2) (18)

Expiredstatuteoflimitations (4) (7) (12)

Endingbalance $ 388 $ 203 $ 164

AsofDecember31,2020,theamountofunrecognizedtaxbenefitwas$388million.Thisamount,ifrecognized,wouldreducetheeffectiveincometaxrate.TheCompany’sunrecognizedtaxbenefitsincreasedprimarilyduetoaprioryeartaxissueresultingfromarefundclaimfiledin2020.

TheCompanyissubjecttotaxintheU.S.,Belgium,Singapore,theUnitedKingdomandvariousotherforeignjurisdictions,aswellasstateandlocaljurisdictions.Uncertaintaxpositionsarereviewedonanongoingbasisandareadjustedafterconsideringfactsandcircumstances, including progress of tax audits, developments in case law and closing of statutes of limitation. Within the nexttwelvemonths,theCompanybelievesthattheresolutionofcertainfederal,foreignandstateandlocalexaminationsarereasonablypossibleandthatachangeinestimate,reducingunrecognizedtaxbenefits,mayoccur.Whilesuchachangemaybesignificant,itisnotpossibletoprovidearangeofthepotentialchangeuntiltheexaminationsprogressfurtherortherelatedstatutesoflimitationexpire. The Company has effectively settled its U.S. federal income tax obligations through 2011. With limited exception, theCompanyisnolongersubjecttostateandlocalorforeignexaminationsbytaxauthoritiesforyearsbefore2010.

At December 31, 2020 and 2019, the Company had a net income tax-related interest payable of $24 million and $13 million,respectively,initsconsolidatedbalancesheet.Tax-relatedinterestincome/(expense)in2020,2019and2018wasnotmaterial.Inaddition,asofDecember31,2020and2019, theamounts theCompanyhas recognized forpenaltiespayable in its consolidatedbalancesheetwerenotmaterial.

Note21.LegalandRegulatoryProceedings

Mastercard isaparty to legalandregulatoryproceedingswithrespect toavarietyofmatters in theordinarycourseofbusiness.Some of these proceedings are based on complex claims involving substantial uncertainties and unascertainable damages.Accordingly,exceptasdiscussedbelow,it isnotpossibletodeterminetheprobabilityoflossorestimatedamages,andtherefore,Mastercardhasnotestablishedreservesforanyoftheseproceedings.WhentheCompanydeterminesthatalossisbothprobableandreasonablyestimable,Mastercardrecordsaliabilityanddisclosestheamountoftheliabilityifitismaterial.Whenamateriallosscontingencyisonlyreasonablypossible,Mastercarddoesnotrecordaliability,butinsteaddisclosesthenatureandtheamountof theclaim,andanestimateof the lossor rangeof loss, if suchanestimatecanbemade. Unlessotherwisestatedbelowwithrespecttothesematters,Mastercardcannotprovideanestimateofthepossiblelossorrangeoflossbasedononeormoreofthefollowing reasons: (1) actual or potential plaintiffs have not claimed an amount of monetary damages or the amounts areunsupportableorexaggerated,(2)themattersareinearlystages,(3)thereisuncertaintyastotheoutcomeofpendingappealsormotions,(4)therearesignificantfactualissuestoberesolved,(5)theexistenceinmanysuchproceedingsofmultipledefendantsorpotentialdefendantswhoseshareofanypotentialfinancialresponsibilityhasyettobedeterminedand/or(6)therearenovellegalissues presented. Furthermore, except as identified with respect to the matters below, Mastercard does not believe that theoutcomeof any individual existing legalor regulatoryproceeding towhich it is apartywill haveamaterial adverseeffecton itsresultsofoperations,financialconditionoroverallbusiness.However,anadversejudgmentorotheroutcomeorsettlementwithrespect toanyproceedingsdiscussedbelowcould result in finesorpaymentsbyMastercardand/orcould requireMastercard tochange itsbusinesspractices. Inaddition,anadverseoutcome inaregulatoryproceedingcould leadtothefilingofcivildamageclaimsandpossiblyresultinsignificantdamageawards.AnyoftheseeventscouldhaveamaterialadverseeffectonMastercard’sresultsofoperations,financialconditionandoverallbusiness.



InterchangeLitigationandRegulatoryProceedings

Mastercard’s interchange fees and other practices are subject to regulatory, legal review and/or challenges in a number ofjurisdictions,includingtheproceedingsdescribedbelow.Whentakenasawhole,theresultingdecisions,regulationsandlegislationwithrespecttointerchangefeesandacceptancepracticesmayhaveamaterialadverseeffectontheCompany’sprospectsforfuturegrowthanditsoverallresultsofoperations,financialpositionandcashflows.

UnitedStates. In June2005,thefirstofaseriesofcomplaintswerefiledonbehalfofmerchants (themajorityof thecomplaintswerestyledasclassactions,althougha fewcomplaintswere filedonbehalfof individualmerchantplaintiffs)againstMastercardInternational, VisaU.S.A., Inc., Visa International ServiceAssociation and a number of financial institutions. Taken together, theclaimsinthecomplaintsweregenerallybroughtunderbothSections1and2oftheShermanAct,whichprohibitmonopolizationandattemptsorconspiraciestomonopolizeaparticularindustry,andsomeofthesecomplaintscontainunfaircompetitionlawclaimsunderstatelaw.Thecomplaintsallege,amongotherthings,thatMastercard,Visa,andcertainfinancialinstitutionsconspiredtosetthepriceofinterchangefees,enactedpointofsaleacceptancerules(includingthenosurchargerule)inviolationofantitrustlawsandengagedinunlawfultyingandbundlingofcertainproductsandservices,resultinginmerchantspayingexcessivecostsfortheacceptanceofMastercardandVisacreditanddebitcards.Thecaseswereconsolidatedforpre-trialproceedingsintheU.S.DistrictCourt for theEasternDistrictofNewYork inMDLNo.1720. Theplaintiffs fileda consolidatedclassactioncomplaint that seekstrebledamages.

InJuly2006,thegroupofpurportedmerchantclassplaintiffsfiledasupplementalcomplaintallegingthatMastercard’sinitialpublicofferingofitsClassACommonStockinMay2006(the“IPO”)andcertainpurportedagreementsenteredintobetweenMastercardand financial institutions in connectionwith the IPO: (1) violate U.S. antitrust laws and (2) constituted a fraudulent conveyancebecausethefinancialinstitutionsallegedlyattemptedtorelease,withoutadequateconsideration,Mastercard’srighttoassessthemforMastercard’slitigationliabilities.Theclassplaintiffssoughttrebledamagesandinjunctivereliefincluding,butnotlimitedto,anorderreversingandunwindingtheIPO.

InFebruary2011,MastercardandMastercardInternationalenteredintoeachof:(1)anomnibusjudgmentsharingandsettlementsharingagreementwithVisaInc.,VisaU.S.A.Inc.andVisaInternationalServiceAssociationandanumberoffinancial institutions;and(2)aMastercardsettlementandjudgmentsharingagreementwithanumberoffinancialinstitutions.Theagreementsprovidefor the apportionmentof certain costs and liabilitieswhichMastercard, theVisaparties and the financial institutionsmay incur,jointlyand/or severally, in theeventofanadverse judgmentor settlementofoneorallof thecases in themerchant litigations.Among a number of scenarios addressed by the agreements, in the event of a global settlement involving the Visa parties, thefinancial institutions andMastercard,Mastercardwould pay 12% of themonetary portion of the settlement. In the event of asettlement involvingonlyMastercardandthefinancial institutionswithrespecttotheir issuanceofMastercardcards,Mastercardwouldpay36%ofthemonetaryportionofsuchsettlement.

InOctober2012,thepartiesenteredintoadefinitivesettlementagreementwithrespecttothemerchantclasslitigation(includingwithrespecttotheclaimsrelatedtotheIPO)andthedefendantsseparatelyenteredintoasettlementagreementwiththeindividualmerchant plaintiffs. The settlements included cash payments that were apportioned among the defendants pursuant to theomnibusjudgmentsharingandsettlementsharingagreementdescribedabove.Mastercardalsoagreedtoprovideclassmemberswith a short-term reduction in default credit interchange rates and tomodify certain of its business practices, including its “nosurcharge”rule. Thecourtgrantedfinalapprovalofthesettlement inDecember2013,andobjectorstothesettlementappealedthat decision to the U.S. Court of Appeals for the Second Circuit. In June 2016, the court of appeals vacated the class actioncertification, reversed thesettlementapprovalandsent thecaseback to thedistrict court for furtherproceedings. Thecourtofappeals’ rulingwasbasedprimarilyonwhether themerchantswereadequately representedby counsel in the settlement. As aresultoftheappellatecourtruling,thedistrictcourtdividedthemerchants’claimsintotwoseparateclasses-monetarydamagesclaims (the “Damages Class”) and claims seeking changes to business practices (the “Rules Relief Class”). The court appointedseparatecounselforeachclass.

InSeptember2018,thepartiestotheDamagesClasslitigationenteredintoaclasssettlementagreementtoresolvetheDamagesClassclaims.Mastercardincreaseditsreserveby$237millionduring2018toreflectbothitsexpectedfinancialobligationundertheDamagesClasssettlementagreementandthefiledandanticipatedopt-outmerchantcases.ThetimeperiodduringwhichDamagesClassmemberswerepermittedtooptoutoftheclasssettlementagreementendedinJuly2019withmerchantsrepresentingslightlymorethan25%of theDamagesClass interchangevolumechoosingtooptoutof thesettlement. Thedistrictcourtgranted finalapprovalofthesettlementinDecember2019.Thedistrictcourt’ssettlementapprovalorderhasbeenappealed.Mastercardhascommencedsettlementnegotiationswithanumberoftheopt-outmerchantsandhasreachedsettlementsand/oragreements inprinciple to settleanumberof these claims. TheDamagesClass settlementagreementdoesnot relate to theRulesReliefClassclaims.SeparatesettlementnegotiationswiththeRulesReliefClassareongoing.InDecember2020,theRulesReliefClassfiledamotion for class certification. Briefingon summary judgmentmotions in theRulesRelief Class andopt-outmerchant caseswascompletedinDecember2020.



AsofDecember31,2020and2019,Mastercardhadaccruedaliabilityof$783millionand$914million,respectively,asareserveforboththeDamagesClasslitigationandtheopt-outmerchantcases.AsofDecember31,2020and2019,Mastercardhad$586millionand$584million,respectively,inaqualifiedcashsettlementfundrelatedtotheDamagesClasslitigationandclassifiedasrestrictedcashonitsconsolidatedbalancesheet.ThereserveasofDecember31,2020forboththeDamagesClasslitigationandtheopt-outmerchants representsMastercard’s best estimateof its probable liabilities in thesematters. Theportionof the accrued liabilityrelatingtoboththeopt-outmerchantsandtheDamagesClasslitigationsettlementdoesnotrepresentanestimateofaloss,ifany,ifthematterswerelitigatedtoafinaloutcome.Mastercardcannotestimatethepotentialliabilityifthatweretooccur.

Canada.InDecember2010,aproposedclassactioncomplaintwascommencedagainstMastercardinQuebeconbehalfofCanadianmerchants. The suit essentially repeated the allegations and arguments of a previously filed application by the CanadianCompetitionBureau to theCanadianCompetitionTribunal (dismissed inMastercard’s favor) concerning certainMastercard rulesrelatedtopoint-of-saleacceptance,includingthe“honorallcards”and“nosurcharge”rules.TheQuebecsuitsoughtcompensatoryandpunitivedamagesinunspecifiedamounts,aswellasinjunctiverelief.Inthefirsthalfof2011,additionalpurportedclassactionlawsuits were commenced in British Columbia and Ontario against Mastercard, Visa and a number of large Canadian financialinstitutions. The British Columbia suit sought compensatory damages in unspecified amounts, and the Ontario suit soughtcompensatorydamagesof$5billiononthebasisofallegedconspiracyandvariousallegedbreachesoftheCanadianCompetitionAct. Additionalpurportedclassactioncomplaintswerecommenced inSaskatchewanandAlbertawith claims that largelymirrorthose intheothersuits. InJune2017,Mastercardentered intoaclasssettlementagreementtoresolvealloftheCanadianclassaction litigation. The settlement, which requiresMastercard to make a cash payment andmodify its “no surcharge” rule, hasreceivedcourtapproval ineachCanadianprovince. Objectors to the settlementhave sought toappeal theapprovalorders. Allappellatecourtshaverejectedtheobjectors’appeals.Inoneoftheappeals,theobjectorshaveuntilApril2021torequestanappealtotheSupremeCourtofCanada.Fortheremainderoftheappeals,theSupremeCourthaspreviouslydeniedsuchrequests.

Europe. In July 2015, the European Commission (“EC”) issued a Statement of Objections related toMastercard’s interregionalinterchange feesandcentralacquiringrulewithin theEuropeanEconomicArea (the“EEA”). TheStatementofObjections,whichfollowedaninvestigationopenedin2013,includedpreliminaryconclusionsconcerningtheallegedanticompetitiveeffectsofthesepractices. In December 2018, Mastercard announced the anticipated resolution of the EC’s investigation. With respect tointerregional interchange fees, Mastercard made a settlement proposal whereby it would make changes to its interregionalinterchangefees. TheECissuedadecisionacceptingthesettlement inApril2019,withchangesto interregional interchangefeesgoingintoeffectinthefourthquarterof2019.Inaddition,withrespecttoMastercard’shistoriccentralacquiringrule,theECissuedanegativedecision in January2019. TheEC’snegativedecisioncoversaperiodof timeof less than twoyearsbefore the rule’smodification. The rulewasmodified in late2015 to complywith the requirementsof theEEA InterchangeFeeRegulation. ThedecisiondoesnotrequireanymodificationofMastercard’scurrentbusinesspracticesbutincludedafineof€571million,whichwaspaidinApril2019.Mastercardincurredachargeof$654millionin2018inrelationtothismatter.

SinceMay2012,anumberofUnitedKingdom(“U.K.”)merchants filedclaimsor threatened litigationagainstMastercardseekingdamages formerchants allegedly paying excessive costs for the acceptance ofMastercard credit and debit cards arising out ofallegedanti-competitiveconductwithrespectto,amongotherthings,Mastercard’scross-borderinterchangefeesanditsU.K.andIrelanddomestic interchangefees(the“U.K.Merchantclaimants”). Inaddition,Mastercard,has facedsimilar filedorthreatenedlitigationbymerchantswithrespecttointerchangeratesinothercountriesinEurope(the“Pan-EuropeanMerchantclaimants”).Inaggregate,theallegeddamagesclaimsfromtheU.K.andPan-EuropeanMerchantclaimantswereintheamountofapproximately£3billion(approximately$4.5billionasofDecember31,2020).Mastercardhasresolvedover£2billion(approximately$3billionasofDecember31,2020)ofthesedamagesclaimsthroughsettlementorjudgment.

InJanuary2017,MastercardreceivedaliabilityjudgmentinitsfavoronallsignificantmattersinaseparateactionbroughtbytenoftheU.K.Merchantclaimants.ThreeoftheU.K.Merchantclaimantsappealedthejudgment,andtheseappealswerecombinedwithMastercard’sappealofa2016judgmentinfavorofoneU.K.merchant.InJuly2018,theU.K.appellatecourtheardtheappealsofthe fourmerchants and ruled against bothMastercard andVisa on two of the three legal issues being considered. The partiesappealed the rulings to theU.K. SupremeCourt. In June 2020, theU.K. SupremeCourt ruled againstMastercard andVisawithrespecttooneoftheliabilityissuesbeingconsideredbytheCourtrelatedtoU.Kdomesticinterchangefees.Additionally,theU.KSupreme Court set out the legal standard that should be applied by lower trial courts with respect to determining whetherinterchangewas exemptible under applicable law, andprovided guidance to lower courtswith regard to the legal standard thatshouldbeappliedinassessingmerchants’damagesclaims.TheU.K.SupremeCourtsentoneofthefourmerchantcasesbacktothetrialcourtforadeterminationofliabilityanddamagesissuesandsenttheremainingthreemerchantcasesbacktothetrialcourtforadeterminationofdamagesissuesonly.Ahearinginoneofthesemerchantcasesonliabilityanddamagesissuesisexpectedtobescheduledforthefourthquarterof2021,whileatrialondamagesfortheotherthreemerchantclaimsisnotexpectedtooccuruntil2023.

Since June2015,Mastercardhasrecorded litigationprovisions forsettlements, judgmentsand legal feesrelatingto theseclaims,includingchargesof$237million in2018. Mastercardcontinues to litigatewith the remainingU.K.andPan-EuropeanMerchantclaimantsandithassubmittedstatementsofdefensedisputingliabilityanddamagesclaims.Themajorityofthesemerchantclaims



generallyhadbeenstayedpendingthedecisionoftheU.K.SupremeCourt,andanumberofthosemattersarenowprogressingwithmotionpracticeanddiscovery. Mastercard incurredchargesof$22million in2020 to reflectboth theestimatedattorneys’ feesincurredbythefourmerchantclaimantsintheU.K.SupremeCourtappeal,aswellassettlementswithanumberofPan-Europeanmerchants.

InSeptember2016,aproposedcollectiveactionwasfiledintheUnitedKingdomonbehalfofU.K.consumersseekingdamagesforintra-EEAanddomesticU.K. interchangefeesthatwereallegedlypassedontoconsumersbymerchantsbetween1992and2008.Thecomplaint,whichseekstoleveragetheEuropeanCommission’s2007decisiononintra-EEAinterchangefees,claimsdamagesinanamountthatexceeds£14billion(approximately$19billionasofDecember31,2020). In July2017, thetrialcourtdeniedtheplaintiffs’application for thecase toproceedasacollectiveaction. InApril2019, theU.K.appellatecourtgranted theplaintiffs’appeal of the trial court’s decision and sent the case back to the trial court for a re-hearing on the plaintiffs’ collective actionapplication.InDecember2020,theU.K.SupremeCourtrejectedMastercard’sappealofthisruling.Thecasehasbeensentbacktothetrialcourtforare-hearingontheplaintiffs’collectiveactionapplicationinlightoftheSupremeCourtdecision.ThehearingisscheduledtooccurinlateMarch2021.

ATMNon-DiscriminationRuleSurchargeComplaints

In October 2011, a trade association of independent Automated Teller Machine (“ATM”) operators and 13 independent ATMoperators filed a complaint styled as a class action lawsuit in the U.S. District Court for the District of Columbia against bothMastercardandVisa(the“ATMOperatorsComplaint”).Plaintiffsseektorepresentaclassofnon-bankoperatorsofATMterminalsthatoperateintheUnitedStateswiththediscretiontodeterminethepriceoftheATMaccessfeefortheterminalstheyoperate.PlaintiffsallegethatMastercardandVisahaveviolatedSection1oftheShermanActbyimposingrulesthatrequireATMoperatorstochargenon-discriminatoryATMsurchargesfortransactionsprocessedoverMastercard’sandVisa’srespectivenetworksthatarenotgreaterthanthesurchargefortransactionsoverothernetworksacceptedatthesameATM.Plaintiffsseekbothinjunctiveandmonetaryreliefequaltotreblethedamagestheyclaimtohavesustainedasaresultoftheallegedviolationsandtheircostsofsuit,includingattorneys’fees.

Subsequently,multiple related complaintswere filed in the U.S. District Court for the District of Columbia alleging both federalantitrustandmultiplestateunfaircompetition,consumerprotectionandcommonlawclaimsagainstMastercardandVisaonbehalfof putative classes of users of ATM services (the “ATM Consumer Complaints”). The claims in these actions largelymirror theallegationsmadeintheATMOperatorsComplaint,althoughthesecomplaintsseekdamagesonbehalfofconsumersofATMserviceswhopayallegedlyinflatedATMfeesatbothbankandnon-bankATMoperatorsasaresultofthedefendants’ATMrules.Plaintiffsseek both injunctive and monetary relief equal to treble the damages they claim to have sustained as a result of the allegedviolationsandtheircostsofsuit,includingattorneys’fees.

In January 2012, the plaintiffs in the ATMOperators Complaint and the ATM Consumer Complaints filed amended class actioncomplaintsthatlargelymirrortheirpriorcomplaints.InFebruary2013,thedistrictcourtgrantedMastercard’smotiontodismissthecomplaintsforfailuretostateaclaim.Onappeal,theCourtofAppealsreversedthedistrictcourt’sorderinAugust2015andsentthe case back for further proceedings. In September 2019, the plaintiffs filed theirmotions for class certification in which theplaintiffs, in aggregate, allegeover$1billion indamagesagainst all of thedefendants. Mastercard intends to vigorouslydefendagainst both the plaintiffs’ liability and damages claims and has opposed class certification. Briefing on class certification iscomplete.

U.S.LiabilityShiftLitigation

InMarch2016,aproposedU.S.merchantclassactioncomplaintwasfiled in federalcourt inCaliforniaallegingthat Mastercard,Visa,AmericanExpressandDiscover(the“NetworkDefendants”),EMVCoandanumberof issuingbanks(the“BankDefendants”)engagedinaconspiracytoshiftfraudliabilityforcardpresenttransactionsfromissuingbankstomerchantsnotyetincompliancewiththestandardsforEMVchipcardsintheUnitedStates(the“EMVLiabilityShift”),inviolationoftheShermanActandCalifornialaw.PlaintiffsallegedamagesequaltothevalueofallchargebacksforwhichclassmembersbecameliableasaresultoftheEMVLiability ShiftonOctober1, 2015. Theplaintiffs seek trebledamages, attorney’s feesand costs andan injunctionagainst futureviolationsofgoverning law,andthedefendantshavefiledamotiontodismiss. InSeptember2016, thedistrictcourtdeniedtheNetworkDefendants’motion todismiss thecomplaint,butgrantedsuchamotion forEMVCoand theBankDefendants. InMay2017, the district court transferred the case to New York so that discovery could be coordinated with the U.S. merchant classinterchange litigationdescribedabove. InAugust2020, thedistrictcourt issuedanordergrantingtheplaintiffs’ request forclasscertification.InJanuary2021,theNetworkDefendants’requestforpermissiontoappealthedistrictcourt’scertificationdecisiontotheappellatecourtwasdenied.Thecaseisproceedingwithsubstantiveexpertdiscovery.



TelephoneConsumerProtectionClassAction

Mastercard is a defendant in a Telephone Consumer Protection Act (“TCPA”) class action pending in Florida. The plaintiffs areindividualsandbusinesseswhoallegethatapproximately381,000unsolicitedfaxesweresenttothemadvertisingaMastercardco-brandcardissuedbyFirstArkansasBank(“FAB”).TheTCPAprovidesforuncappedstatutorydamagesof$500perfax.Mastercardhasassertedvariousdefensestotheclaims,andhasnotifiedFABofanindemnityclaimthatithas(whichFABhasdisputed).InJune2018,thedistrictcourtgrantedMastercard’smotiontostaytheproceedingsuntiltheFederalCommunicationsCommissionmakesadecisionontheapplicationoftheTCPAtoonlinefaxservices.InDecember2019,theFCCissuedadeclaratoryrulingclarifyingthattheTCPAdoesnotapplytofaxessenttoonlinefaxservicesthatarereceivedviae-mail. Asaresultoftheruling,thestayofthelitigation was lifted in January 2020. In January 2021, the magistrate judge serving on the district court issued a decisionrecommending that the district court judge deny plaintiffs’ class certificationmotion. The plaintiffs have the opportunity to fileobjectionstothisdecisionwiththedistrictcourtjudge.

U.S.FederalTradeCommissionInvestigation

InJune2020,theU.S.FederalTradeCommission’sBureauofCompetition(“FTC”)informedMastercardthatithasinitiatedaformalinvestigationintocompliancewiththeDurbinAmendmenttotheDodd-FrankWallStreetReformandConsumerProtectionAct.Inparticular,theinvestigationfocusesonMastercard’scompliancewiththedebitroutingprovisionsoftheDurbinAmendment.TheFTChasissuedasubpoenaandMastercardiscooperatingwithitintheinvestigation.

U.K.PrepaidCardsMatter

MastercardissubjecttoanongoingconfidentiallegalmatterrelatedtoprepaidcardsintheU.K.Thismatterfocusesexclusivelyonhistoricbehavior,andhasnoprospectiveimpactonMastercard’son-goingbusiness.Inconnectionwiththismatter,inthefourthquarterof2020,Mastercardrecordedalitigationchargeof$45million.

Note22.SettlementandOtherRiskManagement

Mastercard’s rules guarantee the settlementofmanyof the transactionsbetween its customers (“settlement risk”). Settlementexposure is the settlement risk to customers under Mastercard’s rules due to the difference in timing between the paymenttransactiondateandsubsequentsettlement.Whilethetermandamountoftheguaranteeareunlimited,thedurationofsettlementexposureisshorttermandtypicallylimitedtoafewdays.

Gross settlement exposure is estimated using the average daily payment volume during the three months prior to period endmultipliedbytheestimatednumberofdaysofexposure.TheCompanyhasglobalriskmanagementpoliciesandprocedures,whichincluderiskstandards,toprovideaframeworkformanagingtheCompany’ssettlementriskandexposure.Intheeventofafailedcustomer, Mastercard may pursue one or more remedies available under the Company’s rules to recover potential losses.Historically,theCompanyhasexperiencedalowleveloflossesfromcustomerfailures.

Aspartofitspolicies,MastercardrequirescertaincustomersthatarenotincompliancewiththeCompany’sriskstandardstopostcollateral,suchascash,lettersofcredit,guarantees,orotherriskmitigatingarrangements.Thisrequirementisbasedonareviewofthe individual risk circumstances for each customer. Mastercard monitors its credit risk portfolio on a regular basis and theadequacy of collateral on hand. Additionally, from time to time, the Company reviews its risk management methodology andstandards.Assuch,theamountsofestimatedsettlementexposurearerevisedasnecessary.

TheCompany’sestimatedsettlementexposurewasasfollowsatDecember31:

2020 2019

(inmillions)

Grosssettlementexposure $ 52,360 $ 55,800

Collateralappliedtosettlementexposure (6,021) (4,772)

Netuncollateralizedsettlementexposure $ 46,339 $ 51,028

Mastercardalsoprovidesguaranteestocustomersandcertainothercounterpartiesindemnifyingthemfromlossesstemmingfromfailuresof thirdparties toperformduties. This includesguaranteesofMastercard-brandedtravelerscheques issued,butnotyetcashedof$370millionand$367millionatDecember31,2020and2019, respectively,ofwhich$294millionand$290millionatDecember 31, 2020 and 2019, respectively, is mitigated by collateral arrangements. In addition, the Company enters intoagreementsintheordinarycourseofbusinessunderwhichtheCompanyagreestoindemnifythirdpartiesagainstdamages,lossesandexpensesincurredinconnectionwithlegalandotherproceedingsarisingfromrelationshipsortransactionswiththeCompany.Certain indemnifications do not provide a statedmaximum exposure. As the extent of the Company’s obligations under theseagreementsdependsentirelyupontheoccurrenceoffutureevents,theCompany’spotentialfutureliabilityundertheseagreements



isnotdeterminable. Historically,paymentsmadebytheCompanyunderthesetypesofcontractualarrangementshavenotbeenmaterial.

Note23.DerivativeandHedgingInstruments

TheCompanymonitorsandmanagesitsforeigncurrencyandinterestrateexposuresaspartofitsoverallriskmanagementprogramwhichfocusesontheunpredictabilityoffinancialmarketsandseekstoreducethepotentiallyadverseeffectsthatthevolatilityofthesemarketsmayhaveonitsoperatingresults.AprimaryobjectiveoftheCompany’sriskmanagementstrategiesistoreducethefinancial impact that may arise from volatility in foreign currency exchange rates principally through the use of both foreignexchange derivative contracts (Derivatives) and foreign currency denominated debt (Net Investment Hedge). In addition, theCompanymay enter into interest rate derivative contracts tomanage the effects of interest ratemovements on theCompany’saggregateliabilityportfolio,includingpotentialfuturedebtissuances(CashFlowHedges).

ForeignExchangeRisk

Derivatives

TheCompanyentersintoforeignexchangederivativecontractstomanagecurrencyexposureassociatedwithanticipatedreceiptsanddisbursementswhicharevaluedbasedoncurrenciesotherthanthefunctionalcurrencyoftheentity.TheCompanymayalsoenterintoforeignexchangederivativecontractstooffsetpossiblechangesinvalueduetoforeignexchangefluctuationsofassetsand liabilities. In addition, theCompany is subject to foreign exchange risk as part of its daily settlement activities. This risk istypicallylimitedtoafewdaysbetweenwhenapaymenttransactiontakesplaceandthesubsequentsettlementwithcustomers.Tomanagethisrisk,theCompanyentersintoshortdurationforeignexchangederivativecontractsbaseduponanticipatedreceiptsanddisbursementsfortherespectivecurrencyposition.TheobjectiveoftheseactivitiesistoreducetheCompany’sexposuretogainsandlossesresultingfromfluctuationsofforeigncurrenciesagainstitsfunctionalcurrencies.

TheCompany’sderivativecontractsaresummarizedbelow:


NotionalFairValue Notional

FairValue

(inmillions)

Commitmentstopurchaseforeigncurrency $ 389 $ 17 $ 185 $ 3

Commitmentstosellforeigncurrency 1,110 (26) 1,506 (25)

Optionstosellforeigncurrency — — 21 2

Balancesheetlocation

Prepaidexpensesandothercurrentassets1 $ 19 $ 12

Othercurrentliabilities1 (28) (32)1 Thederivativecontractsaresubjecttoenforceablemasternettingarrangements,whichcontainvariousnettingandsetoffprovisions.

Theamountof gain (loss) recognizedon the consolidated statementofoperations for the contracts topurchaseand sell foreigncurrencyissummarizedbelow:

YearEndedDecember31,

2020 2019 2018

(inmillions)

Foreignexchangederivativecontracts

Generalandadministrative $ 40 $ (39) $ 53

ThefairvalueoftheforeignexchangederivativecontractsgenerallyreflectstheestimatedamountsthattheCompanywouldreceive(orpay),onapre-taxbasis,toterminatethecontracts. Thetermsoftheforeignexchangederivativecontractsaregenerally lessthan 18 months. The Company had no deferred gains or losses related to foreign exchange contracts in accumulated othercomprehensive income as of December 31, 2020 and 2019, as these contractswere not designated as hedging instruments foraccounting.

TheCompany’sderivativefinancialinstrumentsaresubjecttobothmarketandcounterpartycreditrisk.Marketriskisthepotentialfor economic losses to be incurred onmarket risk sensitive instruments arising from adverse changes inmarket factors such as



foreigncurrencyexchangerates,interestratesandotherrelatedvariables.Counterpartycreditriskistheriskoflossduetofailureof the counterparty to perform its obligations in accordance with contractual terms. To mitigate counterparty credit risk, theCompanyenters intoderivativecontractswithadiversifiedgroupofselectedfinancial institutionsbasedupontheircreditratingsandotherfactors.Generally,theCompanydoesnotobtaincollateralrelatedtoderivativesbecauseofthehighcreditratingsofthecounterparties.

NetInvestmentHedge

TheCompanyusesforeigncurrencydenominateddebttohedgeaportionofitsnetinvestmentinforeignoperationsagainstadversemovements in exchange rates, with changes in the value of the debt recorded within currency translation adjustment inaccumulatedothercomprehensiveincome(loss).In2015,theCompanydesignatedits€1.65billioneuro-denominateddebtasanetinvestmenthedgeforaportionof itsnet investment inEuropeanoperations. AsofDecember31,2020, theCompanyhadanetforeign currency transaction loss of $175 million after tax, in accumulated other comprehensive income (loss) associated withhedgingactivity.

InterestRateRisk

CashFlowHedges

During the fourthquarterof2019, theCompanyentered into treasury rate locks fora totalnotionalamountof$1billion,whichwere accounted for as cash flowhedges. These contractswere entered into to hedge a portionof theCompany’s interest rateexposureattributabletochangesinthetreasuryratesrelatedtotheforecasteddebtissuanceduring2020.ThemaximumlengthoftimeoverwhichtheCompanyhadhedgeditsexposurewas30years.Inconnectionwiththeissuanceofthe2020USDNotes,thesecontractsweresettledandtheCompanypaid$175million.AsofDecember31,2020,acumulativelossof$133million,aftertax,was recorded in accumulated other comprehensive income (loss) associated with these contracts and will be reclassified as anadjustmenttointerestexpenseovertherespectivetermsofthe2020USDNotes.AsofDecember31,2019,theCompanyrecordedapre-taxnetunrealizedgainof$14million ($11million,after tax) inaccumulatedothercomprehensive income (loss)associatedwiththesecontracts.

In2020,theCompanyreclassified$4million,pre-tax,ofthedeferredlossoncashflowderivativecontractsrecordedinaccumulatedothercomprehensiveincome(loss)tointerestexpenseonthestatementofoperations.TheCompanyestimatesthat$6million,pre-tax,ofthedeferredlosswillbereclassifiedintointerestexpensewithinthenext12months.

Note24.SegmentReporting

Mastercardhasconcludedithasonereportableoperatingsegment,“PaymentSolutions.”Mastercard’sChiefExecutiveOfficerhasbeenidentifiedasthechiefoperatingdecision-maker.AlloftheCompany’sactivitiesareinterrelated,andeachactivityisdependentupon and supportive of the other. Accordingly, all significant operating decisions are based upon analysis ofMastercard at theconsolidatedlevel.

RevenuebygeographicmarketisbasedonthelocationoftheCompany’scustomerthatissuedthecard,aswellasthelocationofthemerchantacquirerwhere thecard isbeingused. Revenuegenerated in theU.S.wasapproximately33%of total revenue in2020,32%in2019and33%in2018.Noindividualcountry,otherthantheU.S.,generatedmorethan10%oftotalrevenueinthoseperiods.Mastercarddidnothaveanyindividualcustomerthatgeneratedgreaterthan10%ofnetrevenuein2020,2019or2018.

The following table reflects the geographical location of the Company’s property, equipment and right-of-use assets, net, as ofDecember31:

2020 2019 2018

(inmillions)

UnitedStates $ 1,185 $ 1,147 $ 613

Othercountries 717 681 308

Total $ 1,902 $ 1,828 $ 921



Item9.ChangesinanddisagreementswithaccountantsonaccountingandfinancialdisclosureNotapplicable.

Item9A.Controlsandprocedures

EvaluationofDisclosureControlsandProceduresOurdisclosurecontrolsandprocedures(asdefinedinRules13a-15(e)and15d-15(e)undertheSecuritiesExchangeActof1934,asamended(the“ExchangeAct”)aredesignedtoensurethatinformationrequiredtobedisclosedinthereportsthatwefileorsubmitundertheExchangeActisrecorded,processed,summarizedandreportedwithinthetimeperiodsspecifiedintherulesandformsoftheSecuritiesandExchangeCommissionandtoensurethatinformationrequiredtobedisclosedisaccumulatedandcommunicatedto management, including our President and Chief Executive Officer and our Chief Financial Officer, to allow timely decisionsregardingdisclosure.ThePresidentandChiefExecutiveOfficerandtheChiefFinancialOfficer,withassistancefromothermembersofmanagement,havereviewedtheeffectivenessofourdisclosurecontrolsandproceduresasofDecember31,2020and,basedontheirevaluation,haveconcludedthatthedisclosurecontrolsandprocedureswereeffectiveasofsuchdate.

InternalControloverFinancialReportingIn addition, Mastercard Incorporated’s management assessed the effectiveness of Mastercard’s internal control over financialreportingasofDecember31,2020.Management’sreportoninternalcontroloverfinancialreportingisincludedinPartII,Item8.PricewaterhouseCoopersLLP,anindependentregisteredpublicaccountingfirm,hasauditedtheconsolidatedfinancialstatementsincludedinthisAnnualReportonForm10-Kand,aspartoftheiraudit,hasissuedtheirreport,includedherein,ontheeffectivenessofourinternalcontroloverfinancialreporting.

ChangesinInternalControloverFinancialReportingThere was no change in Mastercard’s internal control over financial reporting that occurred during the three months endedDecember 31, 2020 that has materially affected, or is reasonably likely to materially affect, Mastercard’s internal control overfinancialreporting.

Item9B.OtherInformationPursuant to Section 219 of the Iran Threat Reduction and SyriaHumanRights Act of 2012,we hereby incorporate by referencehereinthedisclosurecontainedinExhibit99.1ofthisReport.

PARTIIITEM9.CHANGESINANDDISAGREEMENTSWITHACCOUNTANTSONACCOUNTINGANDFINANCIALDISCLOSURE


PARTIIIItem10.Directors,executiveofficersandcorporategovernance

Item11.Executivecompensation

Item12.Securityownershipofcertainbeneficialownersandmanagementandrelatedstockholdermatters

Item13.Certainrelationshipsandrelatedtransactions,anddirectorindependence

Item14.Principalaccountantfeesandservices

Item10.Directors,executiveofficersandcorporategovernanceInformationregardingourexecutiveofficersisincludedinsection“Informationaboutourexecutiveofficers”inPartIofthisReport.Additional information required by this Itemwith respect to our directors and executive officers, code of ethics, procedures forrecommendingnominees,auditcommittee,auditcommitteefinancialexpertsandcompliancewithSection16(a)oftheExchangeActwillappearinourdefinitiveproxystatementtobefiledwiththeSECanddeliveredtostockholdersinconnectionwithour2021annualmeetingofstockholders(the“ProxyStatement”).

TheaforementionedinformationintheProxyStatementisincorporatedbyreferenceintothisReport.

Item11.ExecutivecompensationThe information required by this Item with respect to executive officer and director compensation will appear in the ProxyStatementandisincorporatedbyreferenceintothisReport.

Item 12. Security ownership of certain beneficial owners andmanagementandrelatedstockholdermattersTheinformationrequiredbythisItemwithrespecttosecurityownershipofcertainbeneficialownersandmanagementequityandcompensationplanswillappearintheProxyStatementandisincorporatedbyreferenceintothisReport.

Item 13. Certain relationships and related transactions, anddirectorindependenceTheinformationrequiredbythisItemwithrespecttotransactionswithrelatedpersons,thereview,approvalorratificationofsuchtransactionsanddirectorindependencewillappearintheProxyStatementandisincorporatedbyreferenceintothisReport.

Item14.PrincipalaccountantfeesandservicesThe information required by this Item with respect to auditors’ services and fees will appear in the Proxy Statement and isincorporatedbyreferenceintothisReport.

PARTIIIITEM10.DIRECTORS,EXECUTIVEOFFICERSANDCORPORATEGOVERNANCE


PARTIVItem15.Exhibitsandfinancialstatementschedules

Item16.Form10-Ksummary

Item15.Exhibitsandfinancialstatementschedules(a) ThefollowingdocumentsarefiledaspartofthisReport:

1 ConsolidatedFinancialStatements

SeeIndextoConsolidatedFinancialStatementsinPartII,Item8.

2 ConsolidatedFinancialStatementSchedules

None.

3 The following exhibits are filed as part of this Report or, where indicated, were previously filed and are herebyincorporatedbyreference:

RefertotheExhibitIndexincludedherein.

Item16.Form10-KsummaryNone.

PARTIVITEM15.EXHIBITSANDFINANCIALSTATEMENTS


Exhibitindex

Exhibitnumber ExhibitDescription

3.1 Amended and Restated Certificate of Incorporation ofMastercard Incorporated (incorporated by reference toExhibit3.1totheCompany’sCurrentReportonForm8-KfiledSeptember29,2016(FileNo.001-32877)).

3.2 Amended and Restated By-Laws ofMastercard Incorporated (incorporated by reference to Exhibit 3.1 to theCompany’sCurrentReportonForm8-KfiledApril21,2020(FileNo.001-32877)).

4.1 Indenture,datedasofMarch31,2014,betweentheCompanyandDeutscheBankTrustCompanyAmericas,astrustee(incorporatedbyreferencetoExhibit4.1oftheCompany’sCurrentReportonForm8-KfiledonMarch31,2014(FileNo.001-32877)).

4.2 Officer’sCertificateoftheCompany,datedasofMarch31,2014(incorporatedbyreferencetoExhibit4.2oftheCompany’sCurrentReportonForm8-KfiledonMarch31,2014(FileNo.001-32877)).

4.3 FormofGlobalNoterepresentingtheCompany’s2.000%Notesdue2019(includedinOfficer’sCertificateoftheCompany,datedasofMarch31,2014)(incorporatedbyreferencetoExhibit4.3oftheCompany’sCurrentReportonForm8-KfiledonMarch31,2014(FileNo.001-32877)).


4.5 Officer’sCertificateoftheCompany,datedasofDecember1,2015(incorporatedbyreferencetoExhibit4.1oftheCompany’sCurrentReportonForm8-KfiledonDecember1,2015(FileNo.001-32877)).

4.6 FormofGlobalNoterepresentingtheCompany’s1.100%Notesdue2022(includedinOfficer’sCertificateoftheCompany, dated as ofDecember 1, 2015) (incorporatedby reference to Exhibit 4.2 of the Company’s CurrentReportonForm8-KfiledonDecember1,2015(FileNo.001-32877)).



4.9 Officer’sCertificateoftheCompany,datedasofNovember21,2016(incorporatedbyreferencetoExhibit4.1oftheCompany’sCurrentReportonForm8-KfiledonNovember21,2016(FileNo.001-32877)).

4.10 FormofGlobalNoterepresentingtheCompany’s2.000%Notesdue2021(includedinOfficer’sCertificateoftheCompany,datedasofNovember21,2016) (incorporatedbyreferencetoExhibit4.2of theCompany’sCurrentReportonForm8-KfiledonNovember21,2016(FileNo.001-32877)).



4.13 Officer’sCertificateoftheCompany,datedasofFebruary26,2018(incorporatedbyreferencetoExhibit4.1oftheCompany’sCurrentReportonForm8-KfiledonFebruary26,2018(FileNo.001-32877)).

4.14 FormofGlobalNote representing theCompany’s3.5%Notesdue2028 (included inOfficer’sCertificateof theCompany, dated as of February 26, 2018) (incorporated by reference to Exhibit 4.1 of the of the Company’sCurrentReportonForm8-KfiledonFebruary26,2018(FileNo.001-32877)).

4.15 FormofGlobalNoterepresentingtheCompany’s3.95%Notesdue2048(includedinOfficer’sCertificateoftheCompany, dated as of February 26, 2018) (incorporated by reference to Exhibit 4.1 of the Company’s CurrentReportonForm8-KfiledonFebruary26,2018(FileNo.001-32877)).

4.16 Officer’sCertificateoftheCompany,datedasofMay31,2019(incorporatedbyreferencetoExhibit4.1oftheCompany’sCurrentReportonForm8-KfiledonMay31,2019(FileNo.001-32877)).


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4.17 FormofGlobalNoterepresentingtheCompany’s2.950%Notesdue2029(includedinOfficer’sCertificateoftheCompany,datedasofMay31,2019)(incorporatedbyreferencetoExhibit4.1oftheCompany’sCurrentReportonForm8-KfiledonMay31,2019(FileNo.001-32877)).

4.18 FormofGlobalNoterepresentingtheCompany’s3.650%Notesdue2049(includedinOfficer’sCertificateoftheCompany,datedasofMay31,2019)(incorporatedbyreferencetoExhibit4.1oftheCompany’sCurrentReportonForm8-KfiledonMay31,2019(FileNo.001-32877)).

4.19 Officer’sCertificateoftheCompany,datedasofDecember3,2019(incorporatedbyreferencetoExhibit4.1oftheCompany’sCurrentReportonForm8-KfiledonDecember3,2019(FileNo.001-32877)).


4.21 Officer’sCertificateoftheCompany,datedasofMarch26,2020(incorporatedbyreferencetoExhibit4.1oftheCompany’sCurrentReportonForm8-KfiledonMarch26,2020(FileNo.001-32877)).




4.25* DescriptionofSecuritiesRegisteredPursuanttoSection12oftheSecuritiesExchangeActof1934.

10.1 $6,000,000,000AmendedandRestatedCreditAgreement,datedasofNovember14,2019,amongMastercardIncorporated, the several lenders and agents from time to time party thereto, Citibank, N.A., as managingadministrative agent and JPMorgan Chase Bank, N.A. as administrative agent (incorporated by reference toExhibit10.1totheCompany’sAnnualReportonForm10-KfiledFebruary14,2020(FileNo.001-32877)).

10.2+ EmploymentAgreementbetweenMastercard International IncorporatedandAjaypalBanga,datedasof July1,2010(incorporatedbyreferencetoExhibit10.1totheCompany’sCurrentReportonForm8-KfiledJuly8,2010(FileNo.001-32877)).

10.2.1+* EmploymentLetterAgreementbetweenMastercard International IncorporatedandAjaypalBanga,datedasofDecember31,2020.

10.3+ EmploymentAgreementbetweenMartinaHund-MejeanandMastercardInternational,amendedandrestatedasofDecember24,2012(incorporatedbyreferencetoExhibit10.5totheCompany’sAnnualReportonForm10-KfiledFebruary14,2013(FileNo.001-32877)).

10.3.1+ AmendmenttoAmendedandRestatedEmploymentAgreementbetweenMartinaHund-MejeanandMastercardInternational, dated as of December 21, 2017 (incorporated by reference to Exhibit 10.3.1 to the Company’sAnnualReportonForm10-KfiledFebruary14,2018(FileNo.001-32877)).

10.4+ ContractofEmploymentbetweenMastercardUKManagementServicesLimitedandAnnCairns,amendedandrestatedasofApril5,2018(incorporatedbyreferencetoExhibit10.2totheCompany’sQuarterlyReportonForm10-QfiledMay2,2018(FileNo.001-32877)).

10.4.1+ DeedofEmploymentbetweenMastercardUKManagementServicesLimitedandAnnCairns,datedJuly6,2011(incorporatedby reference to Exhibit 10.8.2 to theCompany’sAnnual Report on Form10-K filed February 16,2012(FileNo.001-32877)).

10.5+ Descriptionof EmploymentArrangementwithCraigVosburg (incorporatedby reference to Exhibit 10.1 to theCompany’sQuarterlyReportonForm10-QfiledMay2,2018(FileNo.001-32877)).

10.6+ DescriptionofEmploymentArrangementwithGilbertoCaldart(incorporatedbyreferencetoExhibit10.4totheCompany’sQuarterlyReportonForm10-QfiledApril30,2019(FileNo.001-32877)).

10.7+ Description of Employment Arrangement with TimMurphy (incorporated by reference to Exhibit 10.5 to theCompany’sQuarterlyReportonForm10-QfiledApril30,2019(FileNo.001-32877)).

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10.8+ DescriptionofEmploymentArrangementwithMichaelFroman(incorporatedbyreferencetoExhibit10.1totheCompany’sQuarterlyReportonForm10-QfiledApril29,2020(FileNo.001-32877)).

10.9+ Description of EmploymentArrangementwith SachinMehra (incorporated by reference to Exhibit 10.2 to theCompany’sQuarterlyReportonForm10-QfiledApril29,2020(FileNo.001-32877)).

10.10+ DescriptionofEmploymentArrangementwithMichaelMiebach(incorporatedbyreferencetoExhibit10.3totheCompany’sQuarterlyReportonForm10-QfiledApril29,2020(FileNo.001-32877)).

10.11+* Mastercard International Senior Executive Annual Incentive Compensation Plan, as amended and restatedeffectiveFebruary4,2019.

10.12+ Mastercard International Incorporated Restoration Program, as amended and restated January 1, 2007 unlessotherwiseprovided (incorporatedbyreferencetoExhibit10.22to theCompany’sAnnualReportonForm10-KfiledFebruary19,2009(FileNo.001-32877)).

10.13+ Mastercard Incorporated Deferral Plan, as amended and restated effective December 1, 2008 for accountbalances established after December 31, 2004 (incorporated by reference to Exhibit 10.25 to the Company’sAnnualReportonForm10-KfiledFebruary19,2009(FileNo.001-32877)).

10.14+ Mastercard Incorporated 2006 Long Term Incentive Plan, amended and restated effective June 5, 2012(incorporatedbyreferencetoExhibit10.1totheCompany’sQuarterlyReportonForm10-QfiledAugust1,2012(FileNo.001-32877)).

10.15+ FormofRestrictedStockUnitAgreementforawardsunder2006LongTermIncentivePlan(effectiveforawardsgranted on and subsequent to March 1, 2019) (incorporated by reference to Exhibit 10.1 to the Company’sQuarterlyReportonForm10-QfiledApril30,2019(FileNo.001-32877)).

10.16+ FormofStockOptionAgreementforawardsunder2006LongTermIncentivePlan(effectiveforawardsgrantedon and subsequent toMarch 1, 2019) (incorporated by reference to Exhibit 10.2 to the Company’s QuarterlyReportonForm10-QfiledApril30,2019(FileNo.001-32877)).

10.17+ Form of Performance Stock Unit Agreement for awards under 2006 Long Term Incentive Plan (effective forawards granted on and subsequent to March 1, 2019) (incorporated by reference to Exhibit 10.3 to theCompany’sQuarterlyReportonForm10-QfiledApril30,2019(FileNo.001-32877)).

10.18+ FormofMastercardIncorporatedLongTermIncentivePlanNon-CompetitionandNon-SolicitationAgreementfornamedexecutiveofficers(incorporatedbyreferencetoExhibit10.17totheCompany’sAnnualReportonForm10-KfiledFebruary16,2012(FileNo.001-32877)).

10.19+ AmendedandRestatedMastercardInternationalIncorporatedExecutiveSeverancePlan,amendedandrestatedasofApril10,2018(incorporatedbyreferencetoExhibit10.3totheCompany’sQuarterlyReportonForm10-QfiledMay2,2018(FileNo.001-32877)).

10.20+ AmendedandRestatedMastercardInternationalIncorporatedChangeinControlSeverancePlan,amendedandrestatedasof June25,2018 (incorporatedby reference toExhibit10.1 to theCompany’sQuarterlyReportonForm10-QfiledJuly26,2018(FileNo.001-32877)).

10.21 Schedule of Non-Employee Directors’ Annual Compensation effective as of June 25, 2019 (incorporated byreference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed July 30, 2019 (File No.001-32877)).

10.22 2006 Non-Employee Director Equity Compensation Plan, amended and restated effective as of June 26, 2018(incorporatedbyreferencetoExhibit10.3totheCompany’sQuarterlyReportonForm10-QfiledJuly26,2018(FileNo.001-32877)).

10.23 Form of Deferred Stock Unit Agreement for awards under 2006 Non-Employee Director Equity CompensationPlan,amendedandrestatedeffectiveJune26,2018(effectiveforawardsgrantedonandsubsequenttoJune25,2019)(incorporatedbyreferencetoExhibit10.2totheCompany’sQuarterlyReportonForm10-QfiledJuly30,2019(FileNo.001-32877)).

10.24 FormofRestrictedStockAgreementforawardsunder2006Non-EmployeeDirectorEquityCompensationPlan,amendedandrestatedeffectiveJune26,2018(effectiveforawardsgrantedonandsubsequenttoJune25,2019)(incorporatedbyreferencetoExhibit10.3totheCompany’sQuarterlyReportonForm10-QfiledJuly30,2019(FileNo.001-32877)).

10.25 FormofIndemnificationAgreementbetweenMastercardIncorporatedandcertainofitsdirectors(incorporatedby reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed May 2, 2006 (File No.000-50250)).

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10.26 Form of Indemnification Agreement between Mastercard Incorporated and certain of its director nominees(incorporatedbyreferencetoExhibit10.3 to theCompany’sQuarterlyReportonForm10-QfiledMay2,2006(FileNo.000-50250)).

10.27 DeedofGiftbetweenMastercardIncorporatedandMastercardFoundation(incorporatedbyreferencetoExhibit10.28toPre-EffectiveAmendmentNo.5totheCompany’sRegistrationStatementonFormS-1filedMay3,2006(FileNo.333-128337)).

10.28 SettlementAgreement,datedasofJune4,2003,betweenMastercardInternationalIncorporatedandPlaintiffsintheclassactionlitigationentitledInReVisaCheck/MasterMoneyAntitrustLitigation(incorporatedbyreferencetoExhibit10.1totheCompany’sQuarterlyReportonForm10-QfiledAugust8,2003(FileNo.000-50250)).

10.29 Stipulation and Agreement of Settlement, dated July 20, 2006, betweenMastercard Incorporated, the severaldefendants and the plaintiffs in the consolidated federal class action lawsuit titled In re Foreign CurrencyConversionFeeAntitrustLitigation(MDL1409),andtheCaliforniastatecourtactiontitledSchwartzv.VisaInt’lCorp., et al. (incorporatedby reference toExhibit 10.1 to theCompany’sQuarterlyReportonForm10-Q filedNovember1,2006(FileNo.001-32877)).

10.30 Omnibus Agreement Regarding Interchange Litigation Judgment Sharing and Settlement Sharing, dated as ofFebruary7,2011,byandamongMastercardIncorporated,MastercardInternationalIncorporated,VisaInc.,VisaU.S.A. Inc., Visa International Service Association and Mastercard’s customer banks that are parties thereto(incorporatedbyreferencetoExhibit10.33toAmendmentNo.1totheCompany’sAnnualReportonForm10-K/AfiledonNovember23,2011).

10.30.1 AmendmenttoOmnibusAgreementRegardingInterchangeLitigationJudgmentSharingandSettlementSharing,datedasofAugust25,2014,byandamongMastercardIncorporated,MastercardInternationalIncorporated,VisaInc., Visa U.S.A Inc., Visa International Service Association and Mastercard’s customer banks that are partiesthereto(incorporatedbyreferencetoExhibit10.1totheCompany’sQuarterlyReportonForm10-QfiledOctober30,2014(FileNo.001-32877)).

10.30.2 SecondAmendmenttoOmnibusAgreementRegardingInterchangeLitigationJudgmentSharingandSettlementSharing, dated as of October 22, 2015, by and among Mastercard Incorporated, Mastercard InternationalIncorporated,Visa Inc.,VisaU.S.A Inc.,Visa InternationalServiceAssociationandMastercard’scustomerbanksthatarepartiesthereto(incorporatedbyreferencetoExhibit10.2totheCompany’sQuarterlyReportonForm10-QfiledOctober29,2015(FileNo.001-32877)).

10.31** Mastercard Settlement and Judgment Sharing Agreement, dated as of February 7, 2011, by and amongMastercard Incorporated, Mastercard International Incorporated and Mastercard’s customer banks that arepartiesthereto(incorporatedbyreferencetoExhibit10.34toAmendmentNo.1totheCompany’sAnnualReportonForm10-K/AfiledonNovember23,2011).

10.31.1 Amendment toMastercardSettlementand JudgmentSharingAgreement,datedasofAugust26,2014,byandamongMastercard Incorporated,Mastercard International IncorporatedandMastercard’scustomerbanks thatarepartiesthereto(incorporatedbyreferencetoExhibit10.2totheCompany’sQuarterlyReportonForm10-QfiledOctober30,2014(FileNo.001-32877)).

10.31.2 SecondAmendmenttoMastercardSettlementandJudgmentSharingAgreement,datedasofOctober22,2015,by and among Mastercard Incorporated, Mastercard International Incorporated and Mastercard’s customerbanksthatarepartiesthereto(incorporatedbyreferencetoExhibit10.3totheCompany’sQuarterlyReportonForm10-QfiledOctober29,2015(FileNo.001-32877)).

10.32 SupersedingandAmendedClassSettlementAgreement,datedSeptember17,2018,byandamongMastercardIncorporatedandMastercardInternationalIncorporated;Visa,Inc.,VisaU.S.A.Inc.andVisaInternationalServiceAssociation; the Class Plaintiffs defined therein; and the Customer Banks defined therein (incorporated byreference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed September 18, 2018 (File No.001-32877)).

21* ListofSubsidiariesofMastercardIncorporated.

23.1* ConsentofPricewaterhouseCoopersLLP.

31.1* CertificationofMichaelMiebach,PresidentandChiefExecutiveOfficer,pursuanttoRule13a-14(a)/15d-14(a),asadoptedpursuanttoSection302oftheSarbanes-OxleyActof2002.

31.2* CertificationofSachinMehra,ChiefFinancialOfficer,pursuanttoRule13a-14(a)/15d-14(a),asadoptedpursuanttoSection302oftheSarbanes-OxleyActof2002.

32.1* CertificationofMichaelMiebach,PresidentandChiefExecutiveOfficer,pursuant to18U.S.C. Section1350,asadoptedpursuanttoSection906oftheSarbanes-OxleyActof2002.

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32.2* CertificationofSachinMehra,ChiefFinancialOfficer,pursuantto18U.S.C.Section1350,asadoptedpursuanttoSection906oftheSarbanes-OxleyActof2002.

99.1* DisclosurepursuanttoSection219oftheIranThreatReductionandSyriaHumanRightsActof2012.

101.INS XBRLInstanceDocument-theinstancedocumentdoesnotappearintheInteractiveDataFilebecauseitsXBRLtagsareembeddedwithintheInlineXBRLdocument.

101.SCH* XBRLTaxonomyExtensionSchemaDocument

101.CAL* XBRLTaxonomyExtensionCalculationLinkbaseDocument

101.DEF* XBRLTaxonomyExtensionDefinitionLinkbaseDocument

101.LAB* XBRLTaxonomyExtensionLabelLinkbaseDocument

101.PRE* XBRLTaxonomyExtensionPresentationLinkbaseDocument

+ Managementcontractsorcompensatoryplansorarrangements.* Filedorfurnishedherewith.** ExhibitomitscertaininformationthathasbeenfiledseparatelywiththeU.S.SecuritiesandExchangeCommissionandhasbeengranted

confidentialtreatment.The agreements and other documents filed as exhibits to this report are not intended to provide factual information or otherdisclosureotherthanwithrespecttothetermsoftheagreementsorotherdocumentsthemselves,andshouldnotberelieduponforthatpurpose.Inparticular,anyrepresentationsandwarrantiesmadebytheCompanyintheseagreementsorotherdocumentsweremadesolelywithinthespecificcontextoftherelevantagreementordocumentandmaynotdescribetheactualstateofaffairsasofthedatetheyweremadeoratanyothertime.

EXHIBITINDEX


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Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities ExchangeAct of 1934, the registrant has duly caused thisAnnualReportonForm10-Ktobesignedonitsbehalfbytheundersigned,thereuntodulyauthorized.

MASTERCARDINCORPORATED(Registrant)

Date: February12,2021 By: /s/MICHAELMIEBACH MichaelMiebach PresidentandChiefExecutiveOfficer (PrincipalExecutiveOfficer)

PursuanttotherequirementsoftheSecuritiesExchangeActof1934,thisreporthasbeensignedbelowbythefollowingpersonsonbehalfoftheregistrantandinthecapacitiesandonthedatesindicated:

Date: February12,2021 By: /s/MICHAELMIEBACH

MichaelMiebach

PresidentandChiefExecutiveOfficer;Director

(PrincipalExecutiveOfficer)

Date: February12,2021 By: /s/SACHINMEHRA

SachinMehra

ChiefFinancialOfficer

(PrincipalFinancialOfficer)

Date: February12,2021 By: /s/SANDRAARKELL

SandraArkell

CorporateController

(PrincipalAccountingOfficer)

Date: February12,2021 By: /s/AJAYBANGA

AjayBanga

ExecutiveChairman;Director

Date: February12,2021 By: /s/RICHARDK.DAVIS

RichardK.Davis

Director

Date: February12,2021 By: /s/STEVENJ.FREIBERG

StevenJ.Freiberg

Director


Date: February12,2021 By: /s/JULIUSGENACHOWSKI

JuliusGenachowski

Director

Date: February12,2021 By: /s/CHOONPHONGGOH

ChoonPhongGoh

Director

Date: February12,2021 By: /s/MERITE.JANOW

MeritE.Janow

LeadIndependentDirector

Date: February12,2021 By: /s/OKIMATSUMOTO

OkiMatsumoto

Director

Date: February12,2021 By: /s/YOUNGMEMOON

YoungmeMoon

Director

Date: February12,2021 By: /s/RIMAQURESHI

RimaQureshi

Director

Date: February12,2021 By: /s/JOSÉOCTAVIOREYESLAGUNES

JoséOctavioReyesLagunes

Director

Date: February12,2021 By: /s/GABRIELLESULZBERGER

GabrielleSulzberger

Director

Date: February12,2021 By: /s/JACKSONTAI

JacksonTai

Director

Date: February12,2021 By: /s/LANCEUGGLA

LanceUggla

Director

SIGNATURES


Exhibit 21

LIST OF SUBSIDIARIES OF MASTERCARD INCORPORATED

The following is a list of subsidiaries of Mastercard Incorporated as of December 31, 2020, omitting subsidiaries which,consideredintheaggregate,wouldnotconstituteasignificantsubsidiary:

Name Jurisdiction

GlobalMastercardHoldingsLP UnitedKingdom

MastercardA&MInvestmentHoldings,LLC Delaware

MastercardAsia/PacificPte.Ltd. Singapore

Mastercard/EuropayU.K.Limited UnitedKingdom

MastercardEuropeSA Belgium

MastercardAPFinancingPte.Ltd. Singapore

MastercardFinancingSolutionsLLC Delaware

MastercardHoldingsLP UnitedKingdom

MastercardInternationalIncorporated Delaware

MastercardPaymentGatewayServicesGroupLimited UnitedKingdom

MastercardUKHoldcoLimited UnitedKingdom

MastercardUSHoldingsLLC Delaware

1

EXHIBIT23.1

CONSENTOFINDEPENDENTREGISTEREDPUBLICACCOUNTINGFIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-135572;333-136460and333-143777)andFormS-3(No.333-223679)ofMastercardIncorporatedofourreportdatedFebruary12,2021relatingtothefinancialstatementsandtheeffectivenessofinternalcontroloverfinancialreporting,whichappearsinthisForm10‑K.

/s/PricewaterhouseCoopersLLP

PricewaterhouseCoopersLLPNewYork,NewYorkFebruary12,2021

EXHIBIT 31.1 CERTIFICATION PURSUANT TO

RULE 13a-14(a)/15d-14(a), AS ADOPTED PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Michael Miebach, certify that:

1. I have reviewed this annual report on Form 10-K of Mastercard Incorporated;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February12,2021

By: /s/MichaelMiebach

MichaelMiebach

PresidentandChiefExecutiveOfficer

EXHIBIT 31.2 CERTIFICATION PURSUANT TO

RULE 13a-14(a)/15d-14(a), AS ADOPTED PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Sachin Mehra, certify that:

1. I have reviewed this annual report on Form 10-K of Mastercard Incorporated;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February12,2021

By: /s/SachinMehra

SachinMehra

ChiefFinancialOfficer

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Mastercard Incorporated (the "Company") on Form 10-K for the period ended December 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael Miebach, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

February 12, 2021

/s/ Michael MiebachMichael Miebach

President and Chief Executive Officer

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Mastercard Incorporated (the "Company") on Form 10-K for the period ended December 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Sachin Mehra, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

February 12, 2021

/s/ Sachin MehraSachin Mehra

Chief Financial Officer

EXHIBIT 99.1

Section 13(r) Disclosure

Mastercard Incorporated ("Mastercard") has established a risk-based compliance program designed to prevent us from having business dealings with Iran, as well as other prohibited countries, regions, individuals or entities. This includes obligating issuers and acquirers to screen account holders and merchants, respectively, against the U.S. Office of Foreign Assets Control’s (“OFAC”) sanctions lists, including the List of Specially Designated Nationals (“SDN list”).

We identified through our compliance program that for the period covered by this Report, Mastercard processed transactions resulting from:

• certain acquirers located in the Asia Pacific and Europe regions having acquired transactions for consular services with Iranian embassies in those regions that accepted Mastercard cards

• certain acquirers located in the Europe and Middle East/Africa regions having acquired transactions for an Iranian airline, which accepted Mastercard cards in these regions

OFAC regulations and other legal authorities provide exemptions for certain activities involving dealings with Iran. However, Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012 requires us to disclose whether we, or any of our affiliates, have knowingly engaged in certain transactions or dealings involving the Government of Iran or with certain persons or entities found on the SDN list, regardless of whether these dealings constitute a violation of OFAC regulations.

We do not calculate net revenues or net profits associated with specific merchants (our customers’ customers). However, we used our fee schedule and the aggregate number and amount of transactions involving the Iranian embassies and Iranian airline to estimate the net revenue and net profit we obtained during the three months and year ended December 31, 2020. Both the number of transactions and our estimated net revenue and net profits for this period are de minimis.

MA.12.31.2020 - 10-K

Documents

Transcript of MA.12.31.2020 - 10-K