8-KEarnings & ResultsExhibits & Filings

Mastercard Inc 8-K Report, Financial Results (Oct 30, 2018)

Filed October 30, 2018For Securities:MA

Summary

Mastercard Inc. filed an 8-K on October 30, 2018, to report its third-quarter 2018 financial results. The filing primarily references an attached earnings release (Exhibit 99.1) detailing the company's performance. Investors should note that Mastercard utilizes several non-GAAP financial measures, including adjusted operating expenses, adjusted operating margin, adjusted effective income tax rate, adjusted net income, and adjusted diluted earnings per share. These adjustments are made to exclude the impact of significant litigation provisions and settlements, as well as discrete tax benefits related to these matters across various periods in 2017 and 2018. Management believes these non-GAAP measures provide a clearer view of the underlying operational performance and facilitate period-over-period comparisons.

Key Highlights

  • 1Mastercard reported its Q3 2018 financial results via an 8-K filing on October 30, 2018.
  • 2The filing emphasizes the use of non-GAAP financial measures to present a clearer view of operational performance.
  • 3Key non-GAAP metrics highlighted include adjusted operating expenses, adjusted operating margin, adjusted effective income tax rate, adjusted net income, and adjusted diluted earnings per share.
  • 4These non-GAAP figures exclude significant litigation provisions and settlements, as well as related discrete tax impacts.
  • 5Litigation provisions affecting the results span Q3 2018 (U.K. and Pan-European merchants), Q2 2018 (U.S. merchant class litigation), and Q1 2018 (Pan-European, U.S. opt-out, and U.K. merchants).
  • 6A provision for litigation settlements with Canadian merchants in Q1 2017 is also an excluded item.
  • 7The company also presents currency-neutral growth rates as a non-GAAP measure to adjust for foreign currency impacts.

Frequently Asked Questions

The primary purpose of this 8-K filing is to formally report Mastercard's financial results for the third quarter of 2018, as detailed in their earnings release (Exhibit 99.1).

Mastercard uses non-GAAP measures because management believes they provide a more meaningful comparison of the company's underlying operational performance between periods, excluding the impact of significant and often one-time items like litigation settlements and related tax effects.

The 'Special Items' excluded primarily consist of provisions for litigation settlements with various merchants (U.K., Pan-European, U.S. class action, U.S. opt-out, and Canadian) and discrete tax benefits related to these legal matters. These provisions occurred across different quarters in 2017 and 2018.

Yes, Mastercard also presents currency-neutral growth rates as a non-GAAP measure. This is calculated by restating prior period results using current period exchange rates to remove the effect of foreign currency fluctuations on operating results.