What are the 'special items' that Mastercard is excluding from its non-GAAP financial results?

The 'special items' excluded from non-GAAP financial results in this filing include a significant tax expense due to the Tax Cuts and Jobs Act, charges related to the deconsolidation of Venezuelan subsidiaries, a provision for a litigation settlement with Canadian merchants, and provisions for litigation settlements with merchants in the U.K. from prior periods.

Why does Mastercard present non-GAAP financial measures?

Mastercard presents non-GAAP financial measures because management believes they offer a clearer understanding of the company's ongoing operational performance and allow for more meaningful comparisons between periods by excluding the impact of significant, one-time, or unusual items like tax law changes and litigation settlements.

What is a 'currency-neutral basis' as mentioned in the filing?

A currency-neutral basis is a non-GAAP measure where prior period results are restated using the current period's exchange rates. This is done to remove the impact of foreign currency fluctuations (both transactional and translational) and to show the underlying growth of the business without currency effects.

Where can I find the full financial details and GAAP to non-GAAP reconciliations?

The full financial details, including the GAAP to non-GAAP reconciliations, are available in the earnings release (Exhibit 99.1) attached to this 8-K filing.

MA 8-K: Earnings & Results

Summary

Mastercard Inc. (MA) filed an 8-K on February 1, 2018, to report its financial results for the fourth quarter and full year ended December 31, 2017. The filing primarily consists of an earnings release (Exhibit 99.1) which details both GAAP and non-GAAP financial performance. Investors should note that management utilizes several non-GAAP measures, such as adjusted operating expenses, adjusted net income, and adjusted diluted earnings per share, to provide a clearer view of ongoing operational performance by excluding 'special items.' These 'special items' impacting the reported periods include significant tax expense adjustments related to the Tax Cuts and Jobs Act, charges for the deconsolidation of Venezuelan subsidiaries, and provisions for various litigation settlements, including those with Canadian and U.K. merchants. The company emphasizes that these non-GAAP measures, alongside currency-neutral growth rates, are used internally for evaluation, planning, and compensation, and are intended to facilitate meaningful period-over-period comparisons by removing one-time or unusual impacts. Reconciliations from GAAP to non-GAAP measures are provided within the earnings release.

Key Highlights

1Mastercard filed an 8-K on February 1, 2018, announcing Q4 and Full Year 2017 financial results.
2The filing includes an earnings release (Exhibit 99.1) detailing financial performance.
3The company presents both GAAP and non-GAAP financial results.
4Key non-GAAP measures discussed include adjusted operating expenses, adjusted operating margin, adjusted net income, and adjusted diluted earnings per share.
5Special items excluding from non-GAAP measures include tax reform impacts (Tax Cuts and Jobs Act), Venezuelan subsidiary deconsolidation charges, and provisions for litigation settlements.
6Management believes non-GAAP measures and currency-neutral growth rates provide better insights into ongoing operations and facilitate comparisons.
7Reconciliations between GAAP and non-GAAP financial measures are provided in the earnings release.

Mastercard Inc 8-K Report, Financial Results (Feb 1, 2018)

Summary

Key Highlights

Frequently Asked Questions