What is the main purpose of this 8-K filing?

The main purpose of this 8-K filing is to report Mastercard's financial results for the second quarter of 2018 and to provide access to the accompanying earnings release, which contains detailed financial information and management's commentary.

Why is Mastercard using non-GAAP financial measures?

Mastercard is using non-GAAP financial measures, such as adjusted operating expenses, adjusted net income, and adjusted diluted EPS, to provide a more insightful view of its ongoing operational performance. Management believes these measures are useful because they exclude the impact of significant, infrequent, or unusual items like litigation provisions and settlements, allowing for better comparison of results between periods and evaluation of underlying business trends.

What specific items are being excluded as 'Special Items' in the non-GAAP reporting?

The 'Special Items' being excluded primarily consist of provisions and settlements related to various litigation matters, including U.S. merchant class litigation, U.S. merchant opt-out cases, and settlements with U.K. and Pan-European merchants. A provision for Canadian merchant litigation settlement from Q1 2017 is also mentioned.

How does Mastercard adjust for foreign currency impacts?

Mastercard presents currency-neutral growth rates as a non-GAAP financial measure. This is calculated by remeasuring the prior period's results using the current period's exchange rates to eliminate both translational (effect of translating foreign subsidiaries' results) and transactional (effect of converting revenues and expenses in foreign currencies) impacts of foreign currency fluctuations.

MA 8-K: Earnings & Results

Summary

Mastercard Inc. filed an 8-K on July 26, 2018, to report its second-quarter 2018 financial results. The filing primarily references an attached earnings release (Exhibit 99.1), which details the company's performance. A key focus of the release is Mastercard's use of non-GAAP financial measures, which management believes provide a clearer view of ongoing operational performance by excluding significant litigation-related charges. These "Special Items" include provisions for various U.S. and international merchant litigation and settlements, which impacted reported results in Q2 2018 and prior periods. Investors are encouraged to review these adjustments to understand the underlying operational trends separate from these one-time charges. Furthermore, the earnings release discusses growth rates on a currency-neutral basis, another non-GAAP measure designed to eliminate the impact of foreign currency fluctuations for a more comparable view of performance across periods. Management utilizes these non-GAAP metrics for internal evaluation, planning, and compensation, emphasizing their utility in assessing ongoing business health. The accompanying press release provides reconciliations to GAAP measures, which should be considered alongside the non-GAAP figures for a complete financial picture.

Key Highlights

1Mastercard reported its Q2 2018 financial results via an 8-K filing on July 26, 2018.
2The company is utilizing non-GAAP financial measures to present a clearer view of its ongoing operational performance.
3Significant litigation provisions related to U.S. and international merchant class actions and settlements are being excluded as 'Special Items' from non-GAAP results.
4These litigation charges impacted Q2 2018 results and were also present in prior periods, necessitating adjustments for comparable analysis.
5The earnings release also presents currency-neutral growth rates as a non-GAAP measure to remove foreign exchange impacts.
6Management uses these non-GAAP metrics for internal assessment, planning, and compensation calculations.
7Reconciliations between non-GAAP and GAAP financial measures are provided in the earnings release.

Mastercard Inc 8-K Report, Financial Results (Jul 26, 2018)

Summary

Key Highlights

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