Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 08, 2019 | Jun. 29, 2018 | |
Entity Registrant Name | MASTERCARD INC | ||
Trading Symbol | MA | ||
Entity Central Index Key | 1,141,391 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | Q4 | ||
Amendment Flag | false | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 179.5 | ||
Class A Common Stock | |||
Entity Common Stock, Shares Outstanding | 1,014,237,644 | ||
Class B Common Stock | |||
Entity Common Stock, Shares Outstanding | 11,671,404 |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
ASSETS | ||
Cash and cash equivalents | $ 6,682 | $ 5,933 |
Restricted cash for litigation settlement | 553 | 546 |
Investments | 1,696 | 1,849 |
Accounts receivable | 2,276 | 1,969 |
Settlement due from customers | 2,452 | 1,375 |
Restricted security deposits held for customers | 1,080 | 1,085 |
Prepaid expenses and other current assets | 1,432 | 1,040 |
Total Current Assets | 16,171 | 13,797 |
Property, plant and equipment, net | 921 | 829 |
Deferred income taxes | 570 | 250 |
Goodwill | 2,904 | 3,035 |
Other intangible assets, net | 991 | 1,120 |
Other assets | 3,303 | 2,298 |
Total Assets | 24,860 | 21,329 |
LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY | ||
Accounts payable | 537 | 933 |
Settlement due to customers | 2,189 | 1,343 |
Restricted security deposits held for customers | 1,080 | 1,085 |
Accrued litigation | 1,591 | 709 |
Accrued expenses | 4,747 | 3,931 |
Current portion of long-term debt | 500 | 0 |
Other current liabilities | 949 | 792 |
Total Current Liabilities | 11,593 | 8,793 |
Long-term debt | 5,834 | 5,424 |
Deferred income taxes | 67 | 106 |
Other liabilities | 1,877 | 1,438 |
Total Liabilities | 19,371 | 15,761 |
Commitments and Contingencies | ||
Redeemable non-controlling interests | 71 | 71 |
Stockholders’ Equity | ||
Additional paid-in-capital | 4,580 | 4,365 |
Class A treasury stock, at cost, 368 and 342 shares, respectively | (25,750) | (20,764) |
Retained earnings | 27,283 | 22,364 |
Accumulated other comprehensive income (loss) | (718) | (497) |
Total Stockholders’ Equity | 5,395 | 5,468 |
Non-controlling interests | 23 | 29 |
Total Equity | 5,418 | 5,497 |
Total Liabilities, Redeemable Non-controlling Interests and Equity | 24,860 | 21,329 |
Class A Common Stock | ||
Stockholders’ Equity | ||
Common stock value | 0 | 0 |
Total Equity | 0 | 0 |
Class B Common Stock | ||
Stockholders’ Equity | ||
Common stock value | 0 | 0 |
Total Equity | $ 0 | $ 0 |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Class A treasury stock, shares | 368,000,000 | 342,000,000 |
Class A Common Stock | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, authorized shares | 3,000,000,000 | 3,000,000,000 |
Common stock, issued | 1,387,000,000 | 1,382,000,000 |
Common stock, outstanding | 1,019,000,000 | 1,040,000,000 |
Class B Common Stock | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, authorized shares | 1,200,000,000 | 1,200,000,000 |
Common stock, issued | 12,000,000 | 14,000,000 |
Common stock, outstanding | 12,000,000 | 14,000,000 |
Consolidated Statement of Opera
Consolidated Statement of Operations - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | |||
Net revenue | $ 14,950 | $ 12,497 | $ 10,776 |
Operating Expenses | |||
General and administrative | 5,174 | 4,653 | 3,827 |
Advertising and marketing | 907 | 771 | 698 |
Depreciation and amortization | 459 | 436 | 373 |
Provision for litigation | 1,128 | 15 | 117 |
Total operating expenses | 7,668 | 5,875 | 5,015 |
Operating income | 7,282 | 6,622 | 5,761 |
Other Income (Expense) | |||
Investment income | 122 | 56 | 43 |
Interest expense | (186) | (154) | (95) |
Other income (expense), net | (14) | (2) | (63) |
Total other income (expense) | (78) | (100) | (115) |
Income before income taxes | 7,204 | 6,522 | 5,646 |
Income tax expense | 1,345 | 2,607 | 1,587 |
Net Income | $ 5,859 | $ 3,915 | $ 4,059 |
Basic Earnings per Share | $ 5.63 | $ 3.67 | $ 3.70 |
Basic weighted-average shares outstanding | 1,041 | 1,067 | 1,098 |
Diluted Earnings per Share | $ 5.60 | $ 3.65 | $ 3.69 |
Diluted weighted-average shares outstanding | 1,047 | 1,072 | 1,101 |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net Income | $ 5,859 | $ 3,915 | $ 4,059 |
Other comprehensive income (loss): | |||
Foreign currency translation adjustments | (319) | 565 | (275) |
Income tax effect | 40 | 2 | (11) |
Foreign currency translation adjustments, net of income tax effect | (279) | 567 | (286) |
Translation adjustments on net investment hedge | 96 | (236) | 60 |
Income tax effect | (21) | 83 | (22) |
Translation adjustments on net investment hedge, net of income tax effect | 75 | (153) | 38 |
Defined benefit pension and other postretirement plans | (18) | 15 | (2) |
Income tax effect | 3 | (1) | 0 |
Defined benefit pension and other postretirement plans, net of income tax effect | (15) | 14 | (2) |
Investment securities available-for-sale | (3) | (3) | 3 |
Income tax effect | 1 | 2 | (1) |
Investment securities available-for-sale, net of income tax effect | (2) | (1) | 2 |
Other comprehensive income (loss), net of income tax effect | (221) | 427 | (248) |
Comprehensive Income | $ 5,638 | $ 4,342 | $ 3,811 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Equity - USD ($) $ in Millions | Total | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Additional Paid-In Capital | Class A Treasury Stock | Non- Controlling Interests | Class A Common Stock | Class B Common Stock |
Balance at Dec. 31, 2015 | $ 6,062 | $ 16,222 | $ (676) | $ 4,004 | $ (13,522) | $ 34 | $ 0 | $ 0 |
Net income | 4,059 | 4,059 | ||||||
Activity related to non-controlling interests | (6) | (6) | ||||||
Other comprehensive income (loss), net of tax | (248) | (248) | ||||||
Cash dividends declared on Class A and Class B common stock | (863) | (863) | ||||||
Purchases of treasury stock | (3,503) | (3,503) | ||||||
Shared-based payments | 183 | 179 | 4 | |||||
Conversion of Class B to Class A common stock | 0 | |||||||
Balance at Dec. 31, 2016 | 5,684 | 19,418 | (924) | 4,183 | (17,021) | 28 | 0 | 0 |
Net income | 3,915 | 3,915 | ||||||
Activity related to non-controlling interests | 1 | 1 | ||||||
Other comprehensive income (loss), net of tax | 427 | 427 | ||||||
Cash dividends declared on Class A and Class B common stock | (969) | (969) | ||||||
Purchases of treasury stock | (3,747) | (3,747) | ||||||
Shared-based payments | 186 | 182 | 4 | |||||
Conversion of Class B to Class A common stock | 0 | |||||||
Balance at Dec. 31, 2017 | 5,497 | 22,364 | (497) | 4,365 | (20,764) | 29 | 0 | 0 |
Net income | 5,859 | 5,859 | ||||||
Activity related to non-controlling interests | (6) | (6) | ||||||
Other comprehensive income (loss), net of tax | (221) | (221) | ||||||
Cash dividends declared on Class A and Class B common stock | (1,123) | (1,123) | ||||||
Purchases of treasury stock | (4,991) | 0 | (4,991) | |||||
Shared-based payments | 220 | 215 | 5 | |||||
Conversion of Class B to Class A common stock | 0 | |||||||
Balance at Dec. 31, 2018 | 5,418 | 27,283 | $ (718) | $ 4,580 | $ (25,750) | $ 23 | $ 0 | $ 0 |
Cumulative Effect of New Accounting Principle in Period of Adoption | Adoption of revenue standard | 366 | 366 | ||||||
Cumulative Effect of New Accounting Principle in Period of Adoption | Adoption of intra-entity asset transfers standard | $ (183) | $ (183) |
Consolidated Statement of Cha_2
Consolidated Statement of Changes in Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Stockholders' Equity [Abstract] | |||
Cash dividends declared on Class A and Class B common stock, per share | $ 1.08 | $ 0.91 | $ 0.79 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Activities | |||
Net income | $ 5,859 | $ 3,915 | $ 4,059 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Amortization of customer and merchant incentives | 1,235 | 1,001 | 860 |
Depreciation and amortization | 459 | 437 | 373 |
Share-based compensation | 196 | 176 | 149 |
Tax benefit for share-based payments | 0 | 0 | (48) |
Deferred income taxes | (244) | 86 | (20) |
Venezuela charge | 0 | 167 | 0 |
Other | 31 | 59 | 29 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (317) | (445) | (338) |
Income taxes receivable | (120) | (8) | (1) |
Settlement due from customers | (1,078) | (281) | (10) |
Prepaid expenses | (1,769) | (1,402) | (1,073) |
Accrued litigation and legal settlements | 869 | (12) | 17 |
Restricted security deposits held for customers | (6) | 94 | 96 |
Accounts payable | 101 | 290 | 145 |
Settlement due to customers | 849 | 394 | 66 |
Accrued expenses | 439 | 589 | 520 |
Long-term taxes payable | (20) | 577 | 0 |
Net change in other assets and liabilities | (261) | 27 | (187) |
Net cash provided by operating activities | 6,223 | 5,664 | 4,637 |
Investing Activities | |||
Purchases of investment securities available-for-sale | (1,300) | (714) | (957) |
Purchases of investments held-to-maturity | (509) | (1,145) | (867) |
Proceeds from sales of investment securities available-for-sale | 604 | 304 | 277 |
Proceeds from maturities of investment securities available-for-sale | 379 | 500 | 339 |
Proceeds from maturities of investments held-to-maturity | 929 | 1,020 | 456 |
Purchases of property, plant and equipment | (330) | (300) | (215) |
Capitalized software | (174) | (123) | (167) |
Acquisition of businesses, net of cash acquired | 0 | (1,175) | 0 |
Investment in nonmarketable equity investments | (91) | (147) | (31) |
Other investing activities | (14) | (1) | 2 |
Net cash used in investing activities | (506) | (1,781) | (1,163) |
Financing Activities | |||
Purchases of treasury stock | (4,933) | (3,762) | (3,511) |
Proceeds from debt | 991 | 0 | 1,972 |
Payment of debt | 0 | (64) | 0 |
Dividends paid | (1,044) | (942) | (837) |
Tax benefit for share-based payments | 0 | 0 | 48 |
Tax withholdings related to share-based payments | (80) | (47) | (51) |
Cash proceeds from exercise of stock options | 104 | 57 | 37 |
Other financing activities | (4) | (6) | (2) |
Net cash used in financing activities | (4,966) | (4,764) | (2,344) |
Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents | (6) | 200 | (50) |
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents | 745 | (681) | 1,080 |
Cash, cash equivalents, restricted cash and restricted cash equivalents - beginning of period | 7,592 | 8,273 | 7,193 |
Cash, cash equivalents, restricted cash and restricted cash equivalents - end of period | $ 8,337 | $ 7,592 | $ 8,273 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Organization Mastercard Incorporated and its consolidated subsidiaries, including Mastercard International Incorporated (“Mastercard International” and together with Mastercard Incorporated, “Mastercard” or the “Company”), is a technology company in the global payments industry that connects consumers, financial institutions, merchants, governments, digital partners, businesses and other organizations worldwide, enabling them to use electronic forms of payment instead of cash and checks. The Company makes payments easier and more efficient by creating a wide range of payment solutions and services through a family of well-known brands, including Mastercard®, Maestro® and Cirrus®. The Company is a multi-rail network. Through its core global payments processing network, Mastercard facilitates the switching (authorization, clearing and settlement) of payment transactions, and delivers related products and services. With additional payment capabilities that include real-time account based payments (including automated clearing house (“ACH”) transactions), Mastercard offers customers one partner to turn to for their payment needs for both domestic and cross-border transactions across multiple payment flows. The Company also provides value-added offerings such as safety and security products, information and analytics services, consulting, loyalty and reward programs and issuer and acquirer processing. The Company’s payment solutions are designed to ensure safety and security for the global payments system. A typical transaction on the Company’s core network involves four participants in addition to the Company: account holder (a consumer who holds a card or uses another device enabled for payment), issuer (the account holder’s financial institution), merchant and acquirer (the merchant’s financial institution). The Company does not issue cards, extend credit, determine or receive revenue from interest rates or other fees charged to account holders by issuers, or establish the rates charged by acquirers in connection with merchants’ acceptance of the Company’s branded products. In most cases, account holder relationships belong to, and are managed by, the Company’s financial institution customers. Significant Accounting Policies Consolidation and basis of presentation - The consolidated financial statements include the accounts of Mastercard and its majority-owned and controlled entities, including any variable interest entities (“VIEs”) for which the Company is the primary beneficiary. Investments in VIEs for which the Company is not considered the primary beneficiary are not consolidated and are accounted for as equity method or cost method investments and recorded in other assets on the consolidated balance sheet. At December 31, 2018 and 2017 , there were no significant VIEs which required consolidation and the investments were not considered material to the consolidated financial statements. Intercompany transactions and balances have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the 2018 presentation. For 2017 and 2016, $127 million and $113 million , respectively, of expenses were reclassified from advertising and marketing expenses to general and administrative expenses. The reclassification had no impact on total operating expenses, operating income or net income. The Company follows accounting principles generally accepted in the United States of America (“GAAP”). Prior to December 31, 2017, the Company included the financial results from its Venezuela subsidiaries in the consolidated financial statements using the consolidation method of accounting. In 2017, due to foreign exchange regulations restricting access to U.S. dollars in Venezuela, an other-than-temporary lack of exchangeability between the Venezuelan bolivar and U.S. dollar impacted the Company’s ability to manage risk, process cross-border transactions and satisfy U.S. dollar denominated liabilities related to operations in Venezuela. As a result of these factors, Mastercard concluded that effective December 31, 2017, it did not meet the accounting criteria for consolidation of these Venezuelan subsidiaries, and therefore would transition to the cost method of accounting as of December 31, 2017. This accounting change resulted in a pre-tax charge of $167 million ( $108 million after tax or $0.10 per diluted share) that was recorded in general and administrative expenses on the consolidated statement of operations for the year ended December 31, 2017 . Non-controlling interests represent the equity interest not owned by the Company and are recorded for consolidated entities in which the Company owns less than 100% of the interests. Changes in a parent’s ownership interest while the parent retains its controlling interest are accounted for as equity transactions, and upon loss of control, retained ownership interests are remeasured at fair value, with any gain or loss recognized in earnings. For 2018, 2017 and 2016 , losses from non-controlling interests were de minimis and, as a result, amounts are included on the consolidated statement of operations within other income (expense). The Company accounts for investments in common stock or in-substance common stock under the equity method of accounting when it has the ability to exercise significant influence over the investee, generally when it holds between 20% and 50% ownership in the entity. In addition, investments in flow-through entities such as limited partnerships and limited liability companies are also accounted for under the equity method when the Company has the ability to exercise significant influence over the investee, generally when the investment ownership percentage is equal to or greater than 5% of the outstanding ownership interest. The excess of the cost over the underlying net equity of investments accounted for under the equity method is allocated to identifiable tangible and intangible assets and liabilities based on fair values at the date of acquisition. The amortization of the excess of the cost over the underlying net equity of investments and Mastercard’s share of net earnings or losses of entities accounted for under the equity method of accounting is included in other income (expense) on the consolidated statement of operations. The Company accounts for investments in common stock or in-substance common stock under the cost method of accounting when it does not exercise significant influence, generally when it holds less than 20% ownership in the entity or when the interest in a limited partnership or limited liability company is less than 5% and the Company has no significant influence over the operation of the investee. Investments in companies that Mastercard does not control, but that are not in the form of common stock or in-substance common stock, are also accounted for under the cost method of accounting. These investments for which there is no readily determinable fair value and the cost method of accounting is used are adjusted for changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. Investments for which the equity method or cost method of accounting is used are classified as nonmarketable equity investments and recorded in other assets on the consolidated balance sheet. Use of estimates - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Future events and their effects cannot be predicted with certainty; accordingly, accounting estimates require the exercise of judgment. The accounting estimates used in the preparation of the Company’s consolidated financial statements may change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes. Actual results may differ from these estimates. Revenue recognition - Revenue is recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those goods or services. Revenue is generated by charging fees to issuers, acquirers and other stakeholders for providing switching services, as well as by assessing customers based primarily on the dollar volume of activity, or gross dollar volume, on the cards and other devices that carry the Company’s brands. Revenue is generally derived from transactional information accumulated by Mastercard’s systems or reported by customers. Volume-based revenue (domestic assessments and cross-border volume fees) is recorded as revenue in the period it is earned, which is when the related volume is generated on the cards. Certain volume-based revenue is based upon information reported by customers. Transaction-based revenue is primarily based on the number and type of transactions and is recognized as revenue in the same period in which the related transactions occur. Other payment-related products and services are recognized as revenue in the period in which the related services are performed or transactions occur. Mastercard has business agreements with certain customers that provide for rebates or other support when the customers meet certain volume hurdles as well as other support incentives such as marketing, which are tied to performance. Rebates and incentives are recorded as a reduction of revenue primarily when volume- and transaction-based revenues are recognized over the contractual term. Rebates and incentives are calculated based upon estimated performance and the terms of the related business agreements. In addition, Mastercard may make payments to a customer directly related to entering into an agreement, which are generally capitalized and amortized over the life of the agreement on a straight-line basis. Contract assets include unbilled consideration typically resulting from executed consulting, data analytic and research services performed for customers in connection with Mastercard’s payment network service arrangements. Collection for these services typically occurs over the contractual term. Contract assets are included in prepaid expenses and other current assets and other assets on the consolidated balance sheet. The Company defers the recognition of revenue when consideration has been received prior to the satisfaction of performance obligations. As these performance obligations are satisfied, revenue is subsequently recognized. Deferred revenue is primarily derived from consulting, data analytic and research services. Deferred revenue is included in other current liabilities and other liabilities on the consolidated balance sheet. Business combinations - The Company accounts for business combinations under the acquisition method of accounting. The Company measures the tangible and intangible identifiable assets acquired, liabilities assumed and any non-controlling interest in the acquiree, at their fair values at the acquisition date. Acquisition-related costs are expensed as incurred and are included in general and administrative expenses. Any excess of purchase price over the fair value of net assets acquired, including identifiable intangible assets, is recorded as goodwill. Goodwill and other intangible assets - Indefinite-lived intangible assets consist of goodwill, which represents the synergies expected to arise after the acquisition date and the assembled workforce, and customer relationships. Finite-lived intangible assets consist of capitalized software costs, trademarks, tradenames, customer relationships and other intangible assets. Intangible assets with finite useful lives are amortized over their estimated useful lives, on a straight-line basis, which range from one to twenty years. Capitalized software includes internal and external costs incurred directly related to the design, development and testing phases of each capitalized software project. Impairment of assets - Goodwill and indefinite-lived intangible assets are not amortized but are tested annually for impairment in the fourth quarter, or sooner when circumstances indicate an impairment may exist. The impairment evaluation for goodwill utilizes a quantitative assessment. If the fair value of a reporting unit exceeds the carrying value, goodwill is not impaired. If the fair value of the reporting unit is less than its carrying value, then goodwill is impaired and the excess of the reporting unit’s carrying value over the fair value is recognized as an impairment charge. The impairment test for indefinite-lived intangible assets consists of a qualitative assessment to evaluate relevant events and circumstances that could affect the significant inputs used to determine the fair value of indefinite-lived intangible assets. If the qualitative assessment indicates that it is more likely than not that indefinite-lived intangible assets are impaired, then a quantitative assessment is required. Long-lived assets, other than goodwill and indefinite-lived intangible assets, are tested for impairment whenever events or circumstances indicate that their carrying amount may not be recoverable. If the carrying value of the asset cannot be recovered from estimated future cash flows, undiscounted and without interest, the fair value of the asset is calculated using the present value of estimated net future cash flows. If the carrying amount of the asset exceeds its fair value, an impairment is recorded. Impairment charges, if any, are recorded in general and administrative expenses on the consolidated statement of operations. Litigation - The Company is a party to certain legal and regulatory proceedings with respect to a variety of matters. The Company evaluates the likelihood of an unfavorable outcome of all legal or regulatory proceedings to which it is a party and accrues a loss contingency when the loss is probable and reasonably estimable. These judgments are subjective based on the status of the legal or regulatory proceedings, the merits of its defenses and consultation with in-house and external legal counsel. Legal costs are expensed as incurred and recorded in general and administrative expenses on the consolidated statement of operations. Settlement and other risk management - Mastercard’s rules guarantee the settlement of many of the transactions between its customers. Settlement exposure is the outstanding settlement risk to customers under Mastercard’s rules due to the difference in timing between the payment transaction date and subsequent settlement. While the term and amount of the guarantee are unlimited, the duration of settlement exposure is short term and typically limited to a few days. The Company also enters into agreements in the ordinary course of business under which the Company agrees to indemnify third parties against damages, losses and expenses incurred in connection with legal and other proceedings arising from relationships or transactions with the Company. As the extent of the Company’s obligations under these agreements depends entirely upon the occurrence of future events, the Company’s potential future liability under these agreements is not determinable. The Company accounts for each of its guarantees by recording the guarantee at its fair value at the inception or modification date through earnings. Income taxes - The Company follows an asset and liability based approach in accounting for income taxes as required under GAAP. Deferred income tax assets and liabilities are recorded to reflect the tax consequences on future years of temporary differences between the financial statement carrying amounts and income tax bases of assets and liabilities. Deferred income taxes are displayed separately as noncurrent assets and liabilities on the consolidated balance sheet. Valuation allowances are provided against assets which are not more likely than not to be realized. The Company recognizes all material tax positions, including uncertain tax positions in which it is more likely than not that the position will be sustained based on its technical merits and if challenged by the relevant taxing authorities. At each balance sheet date, unresolved uncertain tax positions are reassessed to determine whether subsequent developments require a change in the amount of recognized tax benefit. The allowance for uncertain tax positions is recorded in other current and noncurrent liabilities on the consolidated balance sheet. The Company records interest expense related to income tax matters as interest expense on the consolidated statement of operations. The Company includes penalties related to income tax matters in the income tax provision. The Company will recognize earnings of foreign affiliates that are determined to be global intangible low taxed income (“GILTI”) in the period it arises and it will not recognize deferred taxes for basis differences that may reverse as GILTI in future years. Cash and cash equivalents - Cash and cash equivalents include certain investments with daily liquidity and with a maturity of three months or less from the date of purchase. Cash equivalents are recorded at cost, which approximates fair value. Restricted cash - The Company classifies cash and cash equivalents as restricted when it is unavailable for withdrawal or use in its general operations. The Company has the following types of restricted cash and restricted cash equivalents: • Restricted cash for litigation settlement - The Company has restricted cash for litigation within a qualified settlement fund related to a preliminary settlement agreement for the U.S. merchant class litigation. The funds continue to be restricted for payments until the litigation matter is resolved. • Restricted security deposits held for customers - The Company requires collateral from certain customers for settlement of their transactions. The majority of collateral for settlement is in the form of standby letters of credit and bank guarantees which are not recorded on the consolidated balance sheet. Additionally, the Company holds cash deposits and certificates of deposit from certain customers as collateral for settlement of their transactions, which are recorded as assets on the consolidated balance sheet. These assets are fully offset by corresponding liabilities included on the consolidated balance sheet. These security deposits are typically held for the duration of the agreement with the customers. • Other restricted cash balances - The Company has other restricted cash balances which include contractually restricted deposits, as well as cash balances that are restricted based on the Company’s intention with regard to usage. These funds are classified on the consolidated balance sheet within prepaid expenses and other current assets and other assets. Fair value - The Company measures certain financial assets and liabilities at fair value on a recurring basis by estimating the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. The Company classifies these recurring fair value measurements into a three-level hierarchy (“Valuation Hierarchy”). The Valuation Hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. A financial instrument’s categorization within the Valuation Hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of the Valuation Hierarchy are as follows: • Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. • Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in inactive markets and inputs that are observable for the asset or liability. • Level 3 - inputs to the valuation methodology are unobservable and cannot be directly corroborated by observable market data. Certain assets are measured at fair value on a nonrecurring basis. The Company’s non-financial assets measured at fair value on a nonrecurring basis include property, plant and equipment, goodwill and other intangible assets. These assets are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. The valuation methods for goodwill and other intangible assets acquired in business combinations involve assumptions concerning comparable company multiples, discount rates, growth projections and other assumptions of future business conditions. The Company uses various valuation techniques to determine fair value, primarily discounted cash flows analysis, relief-from-royalty, and multi-period excess earnings for estimating the fair value of its intangible assets. The Company uses market capitalization for estimating the fair value of its reporting unit. As the assumptions employed to measure these assets are based on management’s judgment using internal and external data, these fair value determinations are classified in Level 3 of the Valuation Hierarchy. Contingent consideration - Certain business combinations involve the potential for future payment of consideration that is contingent upon the achievement of performance milestones. These liabilities are classified within Level 3 of the Valuation Hierarchy as the inputs used to measure fair value are unobservable and require management’s judgment. The fair value of the contingent consideration at the acquisition date and subsequent periods is determined utilizing an income approach based on a Monte Carlo technique and is recorded in other current liabilities and other liabilities on the consolidated balance sheet. Changes to projected performance milestones of the acquired businesses could result in a higher or lower contingent consideration liability. Measurement period adjustments, if any, to the preliminary estimated fair value of contingent consideration as of the acquisition date will be recorded to goodwill, however, changes in fair value as a result of updated assumptions will be recorded in general and administrative expenses on the consolidated statement of operations. Investment securities - The Company classifies investments in debt securities as available-for-sale. Available-for-sale securities that are available to meet the Company’s current operational needs are classified as current assets. Available-for-sale securities that are not available to meet the Company’s current operational needs are classified as non-current assets on the consolidated balance sheet. The investments in debt securities are carried at fair value, with unrealized gains and losses, net of applicable taxes, recorded as a separate component of accumulated other comprehensive income (loss) on the consolidated statement of comprehensive income. Net realized gains and losses on debt securities are recognized in investment income on the consolidated statement of operations. The specific identification method is used to determine realized gains and losses. The Company evaluates its debt securities for other-than-temporary impairment on an ongoing basis. When there has been a decline in fair value of a debt security below the amortized cost basis, the Company recognizes an other-than-temporary impairment if: (1) it has the intent to sell the security; (2) it is more likely than not that it will be required to sell the security before recovery of the amortized cost basis; or (3) it does not expect to recover the entire amortized cost basis of the security. The credit loss component of the impairment would be recognized in other income (expense), net on the consolidated statement of operations while the non-credit loss would remain in accumulated other comprehensive income (loss) until realized from a sale or an other-than-temporary impairment. The Company classifies time deposits with maturities greater than three months as held-to-maturity. Held-to-maturity securities that mature within one year are classified as current assets while held-to-maturity securities with maturities of greater than one year are classified as non-current assets. Time deposits are carried at amortized cost on the consolidated balance sheet and are intended to be held until maturity. Derivative financial instruments - The Company’s derivative financial instruments are recorded as either assets or liabilities on the balance sheet and measured at fair value. The Company’s foreign exchange forward and option contracts are included in Level 2 of the Valuation Hierarchy as the fair value of these contracts are based on inputs, which are observable based on broker quotes for the same or similar instruments. As the Company does not elect hedge accounting for any derivative instruments, realized and unrealized gains and losses from the change in fair value of these contracts are recognized immediately in current-period earnings. The Company’s derivative contracts hedge foreign exchange risk and are not entered into for trading or speculative purposes. The Company did not have any derivative contracts accounted for under hedge accounting as of December 31, 2018 and 2017 . The Company has numerous investments in its foreign subsidiaries. The net assets of these subsidiaries are exposed to volatility in foreign currency exchange rates. The Company uses foreign currency denominated debt to hedge a portion of its net investment in foreign operations against adverse movements in exchange rates. The effective portion of the foreign currency gains and losses related to the foreign currency denominated debt are reported in accumulated other comprehensive income (loss) on the consolidated balance sheet as part of the cumulative translation adjustment component of equity. The ineffective portion, if any, is recognized in earnings in the current period. The Company evaluates the effectiveness of the net investment hedge each quarter. Settlement due from/due to customers - The Company operates systems for clearing and settling payment transactions among customers. Net settlements are generally cleared daily among customers through settlement cash accounts by wire transfer or other bank clearing means. However, some transactions may not settle until subsequent business days, resulting in amounts due from and due to customers. Property, plant and equipment - Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets. Depreciation of leasehold improvements and amortization of capital leases is included in depreciation and amortization expense on the consolidated statement of operations. The useful lives of the Company’s assets are as follows: Asset Category Estimated Useful Life Buildings 30 years Building equipment 10 - 15 years Furniture and fixtures and equipment 3 - 5 years Leasehold improvements Shorter of life of improvement or lease term Capital leases Shorter of life of the asset or lease term Leases - The Company enters into operating and capital leases for the use of premises and equipment. Rent expense related to lease agreements that contain lease incentives is recorded on a straight-line basis over the term of the lease. Pension and other postretirement plans - The Company recognizes the funded status of its single-employer defined benefit pension plans and postretirement plans as assets or liabilities on its consolidated balance sheet and recognizes changes in the funded status in the year in which the changes occur through accumulated other comprehensive income (loss). The funded status is measured as the difference between the fair value of plan assets and the projected benefit obligation at December 31, the measurement date. Overfunded plans, if any, are aggregated and recorded in other assets, while underfunded plans are aggregated and recorded as accrued expenses and other liabilities on the consolidated balance sheet. Net periodic pension and postretirement benefit cost/(income), excluding the service cost component, is recognized in other income (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 other comprehensive income (loss). The service cost component is recognized in general and administrative expenses on the consolidated statement of operations. Defined contribution plans - The Company’s contributions to defined contribution plans are recorded when employees render service to the Company. The charge is recorded in general and administrative expenses on the consolidated statement of operations. Advertising and marketing - Expenses incurred to promote Mastercard’s products, services and brand are recognized in advertising and marketing on the consolidated statement of operations. The cost of media advertising is expensed when the advertising takes place. Advertising production costs are expensed as incurred. Promotional items are expensed at the time the promotional event occurs. Sponsorship costs are recognized over the period of benefit. Foreign currency remeasurement and translation - Monetary assets and liabilities are remeasured to functional currencies using current exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are recorded at historical exchange rates. Revenue and expense accounts are remeasured at the weighted-average exchange rate for the period. Resulting exchange gains and losses related to remeasurement are included in general and administrative expenses on the consolidated statement of operations. Where a non-U.S. currency is the functional currency, translation from that functional currency to U.S. dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for revenue and expense accounts using a weighted-average exchange rate for the period. Resulting translation adjustments are reported as a component of accumulated other comprehensive income (loss). Treasury stock - The Company records the repurchase of shares of its common stock at cost on the trade date of the transaction. These shares are considered treasury stock, which is a reduction to stockholders’ equity. Treasury stock is included in authorized and issued shares but excluded from outstanding shares. Share-based payments - The Company measures share-based compensation expense at the grant date, based on the estimated fair value of the award and uses the straight-line method of attribution, net of estimated forfeitures, for expensing awards over the requisite employee service period. The Company estimates the fair value of its non-qualified stock option awards (“Options”) using a Black-Scholes valuation model. The fair value of restricted stock units (“RSUs”) is determined and fixed on the grant date based on the Company’s stock price, adjusted for the exclusion of dividend equivalents. The Monte Carlo simulation valuation model is used to determine the grant date fair value of performance stock units (“PSUs”) granted. All share-based compensation expenses are recorded in general and administrative expenses on the consolidated statement of operations. Redeemable non-controlling interests - The Company’s business combinations may include provisions allowing non-controlling equity owners the ability to require the Company to purchase additional interests in the subsidiary at their discretion. These interests are initially recorded at fair value and in subsequent reporting periods are accreted or adjusted to their estimated redemption value. These adjustments to the redemption value will impact retained earnings or additional paid-in capital on the consolidated balance sheet, but will not impact the consolidated statement of operations. The redeemable non-controlling interests are considered temporary and reported outside of permanent equity on the consolidated balance sheet at the greater of the carrying amount adjusted for the non-controlling interest’s share of net income (loss) or its redemption value. Earning |
Acquisitions Business Combinati
Acquisitions Business Combination (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Business Combination Disclosure | Acquisitions In 2017 , the Company acquired businesses for total consideration of $1.5 billion , representing both cash and contingent consideration. For the businesses acquired, Mastercard allocated the values associated with the assets, liabilities and redeemable non-controlling interests based on their respective fair values on the acquisition dates. Refer to Note 1 (Summary of Significant Accounting Policies) , for the valuation techniques Mastercard utilizes to fair value the assets and liabilities acquired in business combinations. The residual value allocated to goodwill is not expected to be deductible for local tax purposes. The Company has finalized the purchase accounting for businesses acquired during 2017. The final fair values of the purchase price allocations, as of the acquisition dates, are noted below: (in millions) Cash consideration $ 1,286 Contingent consideration 202 Redeemable non-controlling interests 69 Gain on previously held minority interest 14 Total fair value of businesses acquired $ 1,571 Assets: Cash and cash equivalents $ 111 Other current assets 110 Other intangible assets 488 Goodwill 1,135 Other assets 91 Total assets 1,935 Liabilities: Short-term debt 1 64 Other current liabilities 170 Net pension liability 66 Other liabilities 64 Total liabilities 364 Net assets acquired $ 1,571 1 The short-term debt assumed through acquisitions was repaid during 2017. The following table summarizes the identified intangible assets acquired: Acquisition Date Fair Value Weighted-Average Useful Life (in millions) (Years) Developed technologies $ 319 7.5 Customer relationships 166 9.9 Other 3 1.4 Other intangible assets $ 488 8.3 For the businesses acquired in 2017, the largest acquisition relates to Vocalink, a payment systems and ATM switching platform operator, located principally in the U.K. On April 28, 2017, Mastercard acquired 92.4% controlling interest in Vocalink for cash consideration of £719 million ( $929 million as of the acquisition date). In addition, the Vocalink sellers have the potential to earn additional contingent consideration of £169 million (approximately $214 million as of December 31, 2018 ), upon meeting 2018 revenue targets in accordance with terms of the purchase agreement. Refer to Note 7 (Fair Value and Investment Securities) for additional information related to the fair value of contingent consideration. A majority of Vocalink’s shareholders have retained a 7.6% ownership for at least three years , which is recorded as redeemable non-controlling interests on the consolidated balance sheet. These remaining shareholders have a put option to sell their ownership interest to Mastercard on the third and fifth anniversaries of the transaction and quarterly thereafter (the “Third Anniversary Option” and “Fifth Anniversary Option”, respectively). The Third Anniversary Option is exercisable at a fixed price of £58 million (approximately $73 million as of December 31, 2018 ) (“Fixed Price”). The Fifth Anniversary Option is exercisable at the greater of the Fixed Price or fair value. Additionally, Mastercard has a call option to purchase the remaining interest from Vocalink’s shareholders on the fifth anniversary of the transaction and quarterly thereafter, which is exercisable at the greater of the Fixed Price or fair value. The fair value of the redeemable non-controlling interests was determined utilizing a market approach, which extrapolated the consideration transferred that was discounted for lack of control and marketability. The consolidated financial statements include the operating results of the acquired businesses from the dates of their respective acquisition. Pro forma information related to the acquisitions was not included because the impact on the Company’s consolidated results of operations was not considered to be material. |
Revenue (Notes)
Revenue (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Mastercard’s business model involves four participants in addition to the Company: account holders, issuers (the account holders’ financial institutions), merchants and acquirers (the merchants’ financial institutions). Revenue from contracts with customers is recognized when services are performed in an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those services. Revenue recognized from domestic assessments, cross-border volume fees and transaction processing are derived from Mastercard’s payment network services. Revenue is generated by charging fees to issuers, acquirers and other stakeholders for providing switching services, as well as by assessing customers based primarily on the dollar volume of activity, or gross dollar volume, on the cards and other devices that carry the Company’s brands. Revenue is generally derived from transactional information accumulated by Mastercard’s systems or reported by customers. In addition, the Company recognizes revenue from other payment-related products and services in the period in which the related transactions occur or services are performed. The price structure for Mastercard’s products and services is dependent on the nature of volumes, types of transactions and type of products and services offered to customers. Net revenue can be impacted by the following: • domestic or cross-border transactions • geographic region or country in which the transaction occurs • volumes/transactions subject to tiered rates • processed or not processed by the Company • amount of usage of the Company’s other products or services • amount of rebates and incentives provided to customers The Company classifies its net revenue into the following five categories: Domestic assessments are fees charged to issuers and acquirers based primarily on the dollar volume of activity on cards and other devices that carry the Company’s brands where the acquirer country and the issuer country are the same. Revenue from domestic assessments is recorded as revenue in the period it is earned, which is when the related volume is generated on the cards or other devices that carry the Company’s brands. Cross-border volume fees are charged to issuers and acquirers based on the dollar volume of activity on cards and other devices that carry the Company’s brands where the acquirer country and the issuer country are different. Revenue from cross-border volume is recorded as revenue in the period it is earned, which is when the related volume is generated on the cards or other devices that carry the Company’s brands. Transaction processing revenue is recognized for both domestic and cross-border transactions in the period in which the related transactions occur. Transaction processing includes the following: • Switched transaction revenue is generated from the following products and services: ◦ Authorization is the process by which a transaction is routed to the issuer for approval. In certain circumstances, such as when the issuer’s systems are unavailable or cannot be contacted, Mastercard or others approve such transactions on behalf of the issuer in accordance with either the issuer’s instructions or applicable rules (also known as “stand-in”). ◦ Clearing is the determination and exchange of financial transaction information between issuers and acquirers after a transaction has been successfully conducted at the point of interaction. Transactions are cleared among customers through Mastercard’s central and regional processing systems. ◦ Settlement is facilitating the exchange of funds between parties. • Connectivity fees are charged to issuers, acquirers and other financial institutions for network access, equipment and the transmission of authorization and settlement messages. These fees are based on the size of the data being transmitted and the number of connections to the Company’s network. • Other processing fees include issuer and acquirer processing solutions; payment gateways for e-commerce merchants; mobile gateways for mobile initiated transactions; and safety and security. Other revenues consist of value added service offerings that are typically sold with the Company’s payment service offerings and are recognized in the period in which the related services are performed or transactions occur. Other revenues include the following: • Consulting, data analytic and research fees. • Safety and security services fees are for products and services offered to prevent, detect and respond to fraud and to ensure the safety of transactions made primarily on Mastercard products. • Loyalty and rewards solutions fees are charged to issuers for benefits provided directly to consumers with Mastercard-branded cards, such as access to a global airline lounge network, global and local concierge services, individual insurance coverages, emergency card replacement, emergency cash advance services and a 24-hour cardholder service center. Loyalty and reward solution fees also include rewards campaigns and management services. • Program management services provided to prepaid card issuers consist of foreign exchange margin, commissions, load fees and ATM withdrawal fees paid by cardholders on the sale and encashment of prepaid cards. • Bank account-based payment services relating to ACH transactions and other ACH related services. • Other payment-related products and services, including account and transaction enhancement services, rules compliance and publications. Rebates and incentives (contra-revenue) are provided to customers that meet certain volume targets and can be in the form of a rebate or other support incentives, which are tied to performance. Rebates and incentives are recorded as a reduction of revenue primarily when volume- and transaction-based revenues are recognized over the contractual term. In addition, Mastercard may make incentive payments to a customer directly related to entering into an agreement, which are generally capitalized and amortized over the life of the agreement on a straight-line basis. The following table disaggregates the Company’s net revenue by source and geographic region for the year ended December 31, 2018 : (in millions) Revenue by source: Domestic assessments $ 6,138 Cross-border volume fees 4,954 Transaction processing 7,391 Other revenues 3,348 Gross revenue 21,831 Rebates and incentives (contra-revenue) (6,881 ) Net revenue $ 14,950 Net revenue by geographic region: North American Markets $ 5,311 International Markets 9,441 Other 1 198 Net revenue $ 14,950 1 Includes revenues managed by corporate functions. Receivables from contracts with customers of $2.1 billion and $1.9 billion as of December 31, 2018 and 2017 , respectively, are recorded within accounts receivable on the consolidated balance sheet. The Company’s customers are billed quarterly or more frequently dependent upon the nature of the performance obligation and the underlying contractual terms. The Company does not offer extended payment terms to customers. Contract assets are included in prepaid expenses and other current assets and other assets on the consolidated balance sheet at December 31, 2018 in the amounts of $40 million and $92 million , respectively. The Company did not have contract assets at December 31, 2017 . Deferred revenue is included in other current liabilities and other liabilities on the consolidated balance sheet at December 31, 2018 in the amounts of $218 million and $101 million , respectively. The comparable amounts included in other current liabilities and other liabilities at December 31, 2017 were $230 million and $17 million , respectively. Revenue recognized from such performance obligations satisfied during 2018 was $904 million . The Company’s remaining performance periods for its contracts with customers for its payment network services are typically long-term in nature (generally up to 10 years ). As a payment network service provider, the Company provides its customers with continuous access to its global payment processing network and stands ready to provide transaction processing and related services over the contractual term. Consideration is variable based upon the number of transactions processed and volume activity on the cards and other devices that carry the Company’s brands. The Company has elected the optional exemption to not disclose the remaining performance obligations related to its payment network services. The Company also earns revenues from other value added services comprised of bank account-based payment services, consulting and research fees, loyalty programs and other payment-related products and services. At December 31, 2018 , the estimated aggregate consideration allocated to unsatisfied performance obligations for these other value added services is $1.0 billion , which is expected to be recognized through 2022. The estimated remaining performance obligations related to these revenues are subject to change and are affected by several factors, including modifications and terminations and are not expected to be material to any future annual period. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The components of basic and diluted EPS for common shares for each of the years ended December 31 were as follows: 2018 2017 2016 (in millions, except per share data) Numerator Net income $ 5,859 $ 3,915 $ 4,059 Denominator Basic weighted-average shares outstanding 1,041 1,067 1,098 Dilutive stock options and stock units 6 5 3 Diluted weighted-average shares outstanding 1 1,047 1,072 1,101 Earnings per Share Basic $ 5.63 $ 3.67 $ 3.70 Diluted $ 5.60 $ 3.65 $ 3.69 Note: Table may not sum due to rounding. 1 For the years presented, the calculation of diluted EPS excluded a minimal amount of anti-dilutive share-based payment awards. |
Cash, Cash Equivalents, Restric
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents The following table provides a reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents reported on the consolidated balance sheet that total to the amounts shown on the consolidated statement of cash flows. December 31, 2018 2017 2016 2015 (in millions) Cash and cash equivalents $ 6,682 $ 5,933 $ 6,721 $ 5,747 Restricted cash and restricted cash equivalents Restricted cash for litigation settlement 553 546 543 541 Restricted security deposits held for customers 1,080 1,085 991 895 Prepaid expenses and other current assets 22 28 3 — Other assets — — 15 10 Cash, cash equivalents, restricted cash and restricted cash equivalents $ 8,337 $ 7,592 $ 8,273 $ 7,193 |
Supplemental Cash Flows
Supplemental Cash Flows | 12 Months Ended |
Dec. 31, 2018 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flows | Supplemental Cash Flows The following table includes supplemental cash flow disclosures for each of the years ended December 31: 2018 2017 2016 (in millions) Cash paid for income taxes, net of refunds $ 1,790 $ 1,893 $ 1,579 Cash paid for interest 153 135 74 Cash paid for legal settlements 260 47 101 Non-cash investing and financing activities Dividends declared but not yet paid 340 263 238 Capital leases and other 10 30 3 Fair value of assets acquired, net of cash acquired — 1,825 — Fair value of liabilities assumed related to acquisitions — 365 — |
Fair Value and Investment Secur
Fair Value and Investment Securities | 12 Months Ended |
Dec. 31, 2018 | |
Financial Instruments, Financial Liabilities, Balance Sheet Groupings [Abstract] | |
Fair Value and Investment Securities | Fair Value and Investment Securities Financial Instruments - Recurring Measurements The Company classifies its fair value measurements of financial instruments within the Valuation Hierarchy. There were no transfers made among the three levels in the Valuation Hierarchy for 2018 . The distribution of the Company’s financial instruments measured at fair value on a recurring basis within the Valuation Hierarchy were as follows: December 31, 2018 December 31, 2017 Quoted Prices Significant Significant Total Quoted Prices Significant Significant Total (in millions) Assets Investment securities available for sale 1 : Municipal securities $ — $ 15 $ — $ 15 $ — $ 17 $ — $ 17 Government and agency securities 65 92 — 157 81 104 — 185 Corporate securities — 1,043 — 1,043 — 876 — 876 Asset-backed securities — 217 — 217 — 70 — 70 Equity securities — — — — 1 — — 1 Derivative instruments 2 : Foreign currency derivative assets — 35 — 35 — 6 — 6 Deferred compensation plan 3 : Deferred compensation assets 54 — — 54 55 — — 55 Liabilities Derivative instruments 2 : Foreign currency derivative liabilities $ — $ (6 ) $ — $ (6 ) $ — $ (30 ) $ — $ (30 ) Deferred compensation plan 4 : Deferred compensation liabilities (54 ) — — (54 ) (54 ) — — (54 ) 1 The Company’s U.S. government securities and marketable equity securities are classified within Level 1 of the Valuation Hierarchy as the fair values are based on unadjusted quoted prices for identical assets in active markets. The fair value of the Company’s available-for-sale municipal securities, government and agency securities, corporate securities and asset-backed securities are based on observable inputs such as quoted prices, benchmark yields and issuer spreads for similar assets in active markets and are therefore included in Level 2 of the Valuation Hierarchy. 2 The Company’s foreign currency derivative asset and liability contracts have been classified within Level 2 of the Valuation Hierarchy as the fair value is based on observable inputs such as broker quotes relating to foreign currency exchange rates for similar derivative instruments. See Note 22 (Foreign Exchange Risk Management) for further details. 3 The Company has a nonqualified deferred compensation plan where assets are invested primarily in mutual funds held in a rabbi trust, which is restricted for payments to participants of the plan. The Company has elected to use the fair value option for these mutual funds, which are measured using quoted prices of identical instruments in active markets and are included in prepaid expenses and other current assets on the consolidated balance sheet. 4 The deferred compensation liabilities are measured at fair value based on the quoted prices of identical instruments to the investment vehicles selected by the participants. These are included in other liabilities on the consolidated balance sheet. Settlement and Other Guarantee Liabilities The Company estimates the fair value of its settlement and other guarantees using market assumptions for relevant though not directly comparable undertakings, as the latter are not observable in the market given the proprietary nature of such guarantees. At December 31, 2018 and 2017 , the carrying value and fair value of settlement and other guarantee liabilities were not material and accordingly are not included in the Valuation Hierarchy table above. Settlement and other guarantee liabilities are classified within Level 3 of the Valuation Hierarchy as their valuation requires substantial judgment and estimation of factors that are not observable in the market. See Note 21 (Settlement and Other Risk Management) for additional information regarding the Company’s settlement and other guarantee liabilities. Financial Instruments - Non-Recurring Measurements Held-to-Maturity Securities Investments on the consolidated balance sheet include both available-for-sale and short-term held-to-maturity securities. Held-to-maturity securities are not measured at fair value on a recurring basis and are not included in the Valuation Hierarchy table above. At December 31, 2018 and 2017 , the Company held $264 million and $700 million , respectively, of held-to-maturity securities due within one year. The cost of these securities approximates fair value. Nonmarketable Equity Investments The Company’s nonmarketable equity investments are measured at fair value at initial recognition. In addition, nonmarketable equity investments accounted for under the cost method of accounting are adjusted for changes resulting from identifiable price changes in orderly transactions for the identical or similar investments of the same issuer. Nonmarketable equity investments are classified within Level 3 of the Valuation Hierarchy due to the absence of quoted market prices, the inherent lack of liquidity, and the fact that inputs used to measure fair value are unobservable and require management’s judgment. The Company uses discounted cash flows and market assumptions to estimate the fair value of its nonmarketable equity investments when certain events or circumstances indicate that impairment may exist. These investments are included in other assets on the consolidated balance sheet. See Note 8 (Prepaid Expenses and Other Assets) for further details. Debt The Company estimates the fair value of its long-term debt based on market quotes. These debt instruments are not traded in active markets and are classified as Level 2 of the Valuation Hierarchy. At December 31, 2018 , the carrying value and fair value of total long-term debt (including the current portion) was $6.3 billion and $6.5 billion , respectively. At December 31, 2017 , the carrying value and fair value of long-term debt was $5.4 billion and $5.7 billion , respectively. Other Financial Instruments Certain financial instruments are carried on the consolidated balance sheet at cost, which approximates fair value due to their short-term, highly liquid nature. These instruments include cash and cash equivalents, restricted cash, accounts receivable, settlement due from customers, restricted security deposits held for customers, accounts payable, settlement due to customers and other accrued liabilities. Contingent Consideration The contingent consideration attributable to acquisitions made in 2017 is primarily based on the achievement of 2018 revenue targets and is measured at fair value on a recurring basis. This contingent consideration liability is included in other current liabilities on the consolidated balance sheet and is classified within Level 3 of the Valuation Hierarchy due to the absence of quoted market prices. The activity of the Company’s contingent consideration liability for 2018 was as follows: (in millions) Balance at December 31, 2017 $ 219 Net change in valuation 19 Payments (5 ) Foreign currency translation (14 ) Balance at December 31, 2018 $ 219 Amortized Costs and Fair Values – Available-for-Sale Investment Securities The major classes of the Company’s available-for-sale investment securities, for which unrealized gains and losses are recorded as a separate component of other comprehensive income (loss) on the consolidated statement of comprehensive income, and their respective amortized cost basis and fair values as of December 31, 2018 and 2017 were as follows: December 31, 2018 December 31, 2017 Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value (in millions) Municipal securities $ 15 $ — $ — $ 15 $ 17 $ — $ — $ 17 Government and agency securities 157 — — 157 185 — — 185 Corporate securities 1,044 1 (2 ) 1,043 875 2 (1 ) 876 Asset-backed securities 217 — — 217 70 — — 70 Equity securities — — — — — 1 — 1 Total $ 1,433 $ 1 $ (2 ) $ 1,432 $ 1,147 $ 3 $ (1 ) $ 1,149 The Company’s available-for-sale investment securities held at December 31, 2018 and 2017 , primarily carried a credit rating of A-, or better. The municipal securities are primarily comprised of tax-exempt bonds and are diversified across states and sectors. Government and agency securities include U.S. government bonds, U.S. government sponsored agency bonds and foreign government bonds with similar credit quality to that of the U.S. government bonds. Corporate securities are comprised of commercial paper and corporate bonds. The asset-backed securities are investments in bonds which are collateralized primarily by automobile loan receivables. Investment Maturities: The maturity distribution based on the contractual terms of the Company’s investment securities at December 31, 2018 was as follows: Available-For-Sale Amortized Cost Fair Value (in millions) Due within 1 year $ 376 $ 376 Due after 1 year through 5 years 1,056 1,055 Due after 5 years through 10 years 1 1 Total $ 1,433 $ 1,432 Investment Income Investment income primarily consists of interest income generated from cash, cash equivalents and investments. Gross realized gains and losses are recorded within investment income on the Company’s consolidated statement of operations. The gross realized gains and losses from the sales of available-for-sale securities for 2018 , 2017 and 2016 were not significant. |
Prepaid Expenses and Other Asse
Prepaid Expenses and Other Assets | 12 Months Ended |
Dec. 31, 2018 | |
Prepaid Expense and Other Assets [Abstract] | |
Prepaid Expenses and Other Assets | Prepaid Expenses and Other Assets Prepaid expenses and other current assets consisted of the following at December 31 : 2018 2017 (in millions) Customer and merchant incentives $ 778 $ 464 Prepaid income taxes 51 77 Other 603 499 Total prepaid expenses and other current assets $ 1,432 $ 1,040 Other assets consisted of the following at December 31 : 2018 2017 (in millions) Customer and merchant incentives $ 2,458 $ 1,434 Nonmarketable equity investments 337 249 Prepaid income taxes — 352 Income taxes receivable 298 178 Other 210 85 Total other assets $ 3,303 $ 2,298 Customer and merchant incentives represent payments made to customers and merchants under business agreements. Costs directly related to entering into such an agreement are generally deferred and amortized over the life of the agreement. The increase in customer and merchant incentives and the decrease in prepaid income taxes at December 31, 2018 from December 31, 2017 are primarily due to the impact from the adoption of the new accounting standards pertaining to revenue recognition and intra-entity asset transfers, respectively. See Note 1 (Summary of Significant Accounting Policies) for additional information on the cumulative impact of the adoption of these accounting pronouncements. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment consisted of the following at December 31 : 2018 2017 (in millions) Building, building equipment and land $ 481 $ 455 Equipment 987 841 Furniture and fixtures 85 81 Leasehold improvements 215 166 Property, plant and equipment 1,768 1,543 Less: accumulated depreciation and amortization (847 ) (714 ) Property, plant and equipment, net $ 921 $ 829 As of December 31, 2018 and 2017 , capital leases of $33 million and $32 million , respectively, were included in equipment. Accumulated amortization of these capital leases was $24 million and $18 million as of December 31, 2018 and 2017 , respectively. Depreciation and amortization expense for the above property, plant and equipment was $209 million , $185 million and $151 million for 2018 , 2017 and 2016 , respectively. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The changes in the carrying amount of goodwill for the years ended December 31, 2018 and 2017 were as follows: 2018 2017 (in millions) Beginning balance $ 3,035 $ 1,756 Additions 2 1,136 Foreign currency translation (133 ) 143 Ending balance $ 2,904 $ 3,035 The Company had no accumulated impairment losses for goodwill at December 31, 2018 . Based on annual impairment testing, the Company’s goodwill is not impaired. |
Other Intangible Assets
Other Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Other Intangible Assets | Other Intangible Assets The following table sets forth net intangible assets, other than goodwill, at December 31 : 2018 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (in millions) Finite-lived intangible assets Capitalized software $ 1,514 $ (898 ) $ 616 $ 1,572 $ (888 ) $ 684 Customer relationships 439 (232 ) 207 473 (214 ) 259 Other 46 (45 ) 1 57 (55 ) 2 Total 1,999 (1,175 ) 824 2,102 (1,157 ) 945 Indefinite-lived intangible assets Customer relationships 167 — 167 175 — 175 Total $ 2,166 $ (1,175 ) $ 991 $ 2,277 $ (1,157 ) $ 1,120 The decrease in the gross carrying amount of amortized intangible assets in 2018 was primarily related to the retirement of fully amortized intangible assets, partially offset by additions to capitalized software. Certain intangible assets are denominated in foreign currencies. As such, the change in intangible assets includes a component attributable to foreign currency translation. Based on the qualitative assessment performed in 2018 , it was determined that the Company’s indefinite-lived intangible assets were not impaired. Amortization on the assets above amounted to $250 million , $252 million and $221 million in 2018, 2017 and 2016 , respectively. The following table sets forth the estimated future amortization expense on finite-lived intangible assets on the consolidated balance sheet at December 31, 2018 for the years ending December 31 : (in millions) 2019 $ 248 2020 187 2021 127 2022 51 2023 and thereafter 211 $ 824 |
Accrued Expenses and Accrued Li
Accrued Expenses and Accrued Litigation | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Liabilities [Abstract] | |
Accrued Expenses and Accrued Litigation | Accrued Expenses and Accrued Litigation Accrued expenses consisted of the following at December 31 : 2018 2017 (in millions) Customer and merchant incentives $ 3,275 $ 2,648 Personnel costs 744 613 Advertising 103 88 Income and other taxes 158 194 Other 467 388 Total accrued expenses $ 4,747 $ 3,931 Customer and merchant incentives represent amounts to be paid to customers under business agreements. The increase in customer and merchant incentives is due to the adoption of the new accounting standard pertaining to revenue recognition and timing of payments to customers. See Note 1 (Summary of Significant Accounting Policies) for additional information on the cumulative impact of the adoption of the revenue recognition guidance. As of December 31, 2018 and 2017 , the Company’s provision for litigation was $1,591 million and $709 million , respectively. These amounts are not included in the accrued expenses table above and are separately reported as accrued litigation on the consolidated balance sheet. See Note 20 (Legal and Regulatory Proceedings) for additional information regarding the Company’s accrued litigation. |
Pension, Postretirement and Sav
Pension, Postretirement and Savings Plans | 12 Months Ended |
Dec. 31, 2018 | |
Defined Benefit Plan [Abstract] | |
Pension, Postretirement and Savings Plans | Pension, Postretirement and Savings Plans The Company and certain of its subsidiaries maintain various pension and other postretirement plans that cover substantially all employees worldwide. Defined Contribution Plans The Company sponsors defined contribution retirement plans. The primary plan is the Mastercard Savings Plan, a 401(k) plan for substantially all of the Company’s U.S. employees, which is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended. In addition, the Company has several defined contribution plans outside of the U.S. The Company’s total expense for its defined contribution plans was $98 million , $84 million and $73 million in 2018, 2017 and 2016 , respectively. Defined Benefit and Other Postretirement Plans The Company sponsors pension and postretirement plans for certain non-U.S. employees (the “non-U.S. Plans”) that cover various benefits specific to their country of employment. In 2017, the Company acquired a majority interest in Vocalink. Vocalink has a defined benefit pension plan (the “Vocalink Plan”) which was permanently closed to new entrants and future accruals as of July 21, 2013, however, plan participants’ obligations are adjusted for future salary changes. The Company has agreed to make contributions of £15 million (approximately $18 million as of December 31, 2018 ) annually until March 2020. The term “Pension Plans” includes the non-U.S. Plans and the Vocalink Plan. The Company maintains a postretirement plan providing health coverage and life insurance benefits for substantially all of its U.S. employees hired before July 1, 2007 (the “Postretirement Plan”). The Company uses a December 31 measurement date for the Pension Plans and its Postretirement Plan (collectively the “Plans”). The Company recognizes the funded status of its Plans, measured as the difference between the fair value of the plan assets and the projected benefit obligation, in the consolidated balance sheet. The following table sets forth the Plans’ funded status, key assumptions and amounts recognized in the Company’s consolidated balance sheet at December 31 : Pension Plans Postretirement Plan 2018 2017 2018 2017 ($ in millions) Change in benefit obligation Benefit obligation at beginning of year $ 468 $ 46 $ 61 $ 59 Benefit obligation acquired during the year — 410 — — Service cost 9 9 1 1 Interest cost 12 8 2 2 Actuarial (gain) loss (7 ) (44 ) (2 ) 3 Benefits paid (22 ) (12 ) (5 ) (4 ) Transfers in 1 3 — — Foreign currency translation (23 ) 48 — — Benefit obligation at end of year 438 468 57 61 Change in plan assets Fair value of plan assets at beginning of year 427 33 — — Fair value of plan assets acquired during the year — 344 — — Actual (loss) gain on plan assets (8 ) (4 ) — — Employer contributions 33 23 5 4 Benefits paid (23 ) (12 ) (5 ) (4 ) Transfers in 2 3 — — Foreign currency translation (21 ) 40 — — Fair value of plan assets at end of year 410 427 — — Funded status at end of year $ (28 ) $ (41 ) $ (57 ) $ (61 ) Amounts recognized on the consolidated balance sheet consist of: Other liabilities, short-term $ — $ — $ (3 ) $ (3 ) Other liabilities, long-term (28 ) (41 ) (54 ) (58 ) $ (28 ) $ (41 ) $ (57 ) $ (61 ) Accumulated other comprehensive income consists of: Net actuarial (gain) loss $ (5 ) $ (22 ) $ (7 ) $ (5 ) Prior service credit 1 — (6 ) (8 ) Balance at end of year $ (4 ) $ (22 ) $ (13 ) $ (13 ) Weighted-average assumptions used to determine end of year benefit obligations Discount rate Non-U.S. Plans 1.80 % 1.80 % * * Vocalink Plan 3.10 % 2.80 % * * Postretirement Plan * * 4.25 % 3.50 % Rate of compensation increase Non-U.S. Plans 2.60 % 2.60 % * * Vocalink Plan 4.00 % 3.85 % * * Postretirement Plan * * 3.00 % 3.00 % * Not applicable Each of the Pension Plans had benefit obligations in excess of plan assets at December 31, 2018 and 2017 . Information on the Pension Plans were as follows: 2018 2017 (in millions) Projected benefit obligation $ 438 $ 468 Accumulated benefit obligation 430 428 Fair value of plan assets 410 427 For the year ended December 31, 2018, the Company’s projected benefit obligation related to its Pension Plans decreased $30 million attributable primarily to foreign currency translation and benefits paid. For the year ended December 31, 2017, the Company’s projected benefit obligation related to its Pension Plans increased $422 million attributable primarily to the acquisition of Vocalink. Components of net periodic benefit cost recorded in earnings were as follows for the Plans for each of the years ended December 31 : Pension Plans Postretirement Plan 2018 2017 2016 2018 2017 2016 (in millions) Service cost $ 9 $ 9 $ 10 $ 1 $ 1 $ 1 Interest cost 12 8 1 2 2 2 Expected return on plan assets (20 ) (13 ) (1 ) — — — Curtailment gain — — — — — — Amortization of actuarial loss — — — — — — Amortization of prior service credit — — — (2 ) (2 ) (1 ) Pension settlement charge — — — — — — Net periodic benefit cost $ 1 $ 4 $ 10 $ 1 $ 1 $ 2 Net periodic benefit cost, excluding the service cost component, is recognized in other income (expense) on the consolidated statement of operations. The service cost component is recognized in general and administrative expenses on the consolidated statement of operations. Other changes in plan assets and benefit obligations recognized in other comprehensive income for the years ended December 31 were as follows: Pension Plans Postretirement Plan 2018 2017 2016 2018 2017 2016 (in millions) Curtailment gain $ — $ — $ — $ — $ — $ — Current year actuarial loss (gain) 17 (22 ) 1 (2 ) 5 — Current year prior service credit 1 — — — — — Amortization of prior service credit — — — 2 2 1 Pension settlement charge — — — — — — Total other comprehensive loss (income) $ 18 $ (22 ) $ 1 $ — $ 7 $ 1 Total net periodic benefit cost and other comprehensive loss (income) $ 19 $ (18 ) $ 11 $ 1 $ 8 $ 3 Assumptions Weighted-average assumptions used to determine net periodic benefit cost were as follows for the years ended December 31 : Pension Plans Postretirement Plan 2018 2017 2016 2018 2017 2016 Discount rate Non-U.S. Plans 1.80 % 1.60 % 1.85 % * * * Vocalink Plan 2.80 % 2.50 % * * * * Postretirement Plan * * * 3.50 % 4.00 % 4.25 % Expected return on plan assets Non-U.S. Plans 3.00 % 3.25 % 3.25 % * * * Vocalink Plan 4.75 % 4.75 % * * * * Rate of compensation increase Non-U.S. Plans 2.60 % 2.59 % 2.64 % * * * Vocalink Plan 3.85 % 3.95 % * * * * Postretirement Plan * * * 3.00 % 3.00 % 3.00 % * Not applicable The Company’s discount rate assumptions are based on yield curves derived from high quality corporate bonds, which are matched to the expected cash flows of each respective plan. The expected return on plan assets assumptions are derived using the current and expected asset allocations of the Pension Plans’ assets and considering historical as well as expected returns on various classes of plan assets. The rates of compensation increases are determined by the Company, based upon its long-term plans for such increases. The following additional assumptions were used at December 31 in accounting for the Postretirement Plan: 2018 2017 Health care cost trend rate assumed for next year 6.00 % 6.50 % Ultimate trend rate 5.00 % 5.00 % Year that the rate reaches the ultimate trend rate 2 3 Assets Plan assets are managed taking into account the timing and amount of future benefit payments. The Vocalink Plan assets are managed within the following target asset allocations: non-government fixed income 39% , government securities (including U.K. governmental bonds) 28% , investment funds 25% and other 8% . The investment funds are currently comprised of approximately 44% derivatives, 28% equity, 16% fixed income and 12% other. For the non-U.S. Plans, the assets are concentrated primarily in insurance contracts. The Valuation Hierarchy of the Pension Plans’ assets is determined using a consistent application of the categorization measurements for the Company’s financial instruments. See Note 1 (Summary of Significant Accounting Policies) for additional information. Cash and cash equivalents and other public investment vehicles (including certain mutual funds and government and agency securities) are valued at quoted market prices, which represent the net asset value of the shares held by the Vocalink Plan, and are therefore included in Level 1 of the Valuation Hierarchy. Certain other mutual funds (including commingled funds), governmental and agency securities and insurance contracts are valued at unit values provided by investment managers, which are based on the fair value of the underlying investments utilizing public information, independent external valuation from third-party services or third-party advisors, and are therefore included in Level 2 of the Valuation Hierarchy. Asset-backed securities are classified as Level 3 due to a lack of observable inputs in measuring fair value. The following tables set forth by level, within the Valuation Hierarchy, the Pension Plans’ assets at fair value as of December 31, 2018 and 2017 : December 31, 2018 December 31, 2017 Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Fair Value Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Fair Value (in millions) Cash and cash equivalents $ 22 $ — $ — $ 22 $ 21 $ — $ — $ 21 Government and agency securities — 88 — 88 21 95 — 116 Mutual funds 154 30 — 184 146 28 — 174 Insurance contracts — 57 — 57 — 45 — 45 Asset-backed securities — — 34 34 — — 31 31 Other — 25 — 25 2 16 22 40 Total $ 176 $ 200 $ 34 $ 410 $ 190 $ 184 $ 53 $ 427 The following table summarizes expected benefit payments through 2028 for the Pension Plans and the Postretirement Plan, including those payments expected to be paid from the Company’s general assets. Actual benefit payments may differ from expected benefit payments. Pension Plans Postretirement Plan (in millions) 2019 $ 14 $ 3 2020 10 4 2021 11 4 2022 14 4 2023 13 4 2024 - 2028 64 20 |
Debt (Notes)
Debt (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Instruments [Abstract] | |
Debt | Debt Long-term debt consisted of the following at December 31: Notes Issuance Date Interest Payment Terms Maturity Date Aggregate Principal Amount Stated Interest Rate Effective Interest Rate 2018 2017 (in millions, except percentages) 2018 USD Notes February 2018 Semi-annually 2028 $ 500 3.500 % 3.598 % $ 500 $ — 2048 $ 500 3.950 % 3.990 % 500 — $ 1,000 2016 USD Notes November 2016 Semi-annually 2021 $ 650 2.000 % 2.236 % 650 650 2026 750 2.950 % 3.044 % 750 750 2046 600 3.800 % 3.893 % 600 600 $ 2,000 2015 Euro Notes December 2015 Annually 2022 € 700 1.100 % 1.265 % 801 839 2027 800 2.100 % 2.189 % 916 958 2030 150 2.500 % 2.562 % 172 180 € 1,650 2014 USD Notes March 2014 Semi-annually 2019 $ 500 2.000 % 2.178 % 500 500 2024 1,000 3.375 % 3.484 % 1,000 1,000 $ 1,500 6,389 5,477 Less: Unamortized discount and debt issuance costs (55 ) (53 ) Total debt outstanding 6,334 5,424 Less: Current portion 1 (500 ) — Long-term debt $ 5,834 $ 5,424 1 Relates to the current portion of the 2014 USD Notes, due in April 2019, classified as current portion of long-term debt on the consolidated balance sheet. In February 2018, the Company issued $500 million principal amount of notes due February 2028 and $500 million principal amount of notes due February 2048 (collectively the “2018 USD Notes”). The net proceeds from the issuance of the 2018 USD Notes, after deducting the original issue discount, underwriting discount and offering expenses, were $991 million . The net proceeds, after deducting the original issue discount, underwriting discount and offering expenses, from the issuance of the 2016 USD Notes, the 2015 Euro Notes and the 2014 USD Notes, were $1.969 billion , $1.723 billion and $1.484 billion , respectively. The outstanding debt, described above, is not subject to any financial covenants and it may be redeemed in whole, or in part, at the Company’s option at any time for a specified make-whole amount. These notes are senior unsecured obligations and would rank equally with any future unsecured and unsubordinated indebtedness. The proceeds of the notes are to be used for general corporate purposes. Scheduled annual maturities of the principal portion of long-term debt outstanding at December 31, 2018 are summarized below. (in millions) 2019 $ 500 2020 — 2021 650 2022 801 2023 — Thereafter 4,438 Total $ 6,389 On November 15, 2018, the Company increased its commercial paper program (the “Commercial Paper Program”) from $3.75 billion to $4.5 billion under which the Company is authorized to issue unsecured commercial paper notes with maturities of up to 397 days from the date of issuance. The Commercial Paper Program is available in U.S. dollars. In conjunction with the Commercial Paper Program, the Company entered into a committed five-year unsecured $4.5 billion revolving credit facility (the “Credit Facility”) on November 15, 2018. The Credit Facility, which expires on November 15, 2023, amended and restated the Company’s prior $3.75 billion credit facility which was set to expire in October 2022. Borrowings under the Credit Facility are available in U.S. dollars and/or euros. The facility fee under the Credit Facility is determined according to the Company’s credit rating and is payable on the average daily commitment, regardless of usage, per annum. In addition to the facility fee, interest rates on borrowings under the Credit Facility would be based on prevailing market interest rates plus applicable margins that fluctuate based on the Company’s credit rating. The Credit Facility contains customary representations, warranties, events of default and affirmative and negative covenants, including a financial covenant limiting the maximum level of consolidated debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”). The Company was in compliance in all material respects with the covenants of the Credit Facility at December 31, 2018 and 2017 . The majority of Credit Facility lenders are customers or affiliates of customers of Mastercard. Borrowings under the Commercial Paper Program and the Credit Facility are used to provide liquidity for general corporate purposes, including providing liquidity in the event of one or more settlement failures by the Company’s customers. The Company may borrow and repay amounts under the Commercial Paper Program and Credit Facility from time to time. The Company had no borrowings under the Credit Facility and the Commercial Paper Program at December 31, 2018 and 2017 . In March 2018, the Company filed a universal shelf registration statement (replacing a previously filed shelf registration statement that was set to expire) to provide additional access to capital, if needed. Pursuant to the shelf registration statement, the Company may from time to time offer to sell debt securities, guarantees of debt securities, preferred stock, Class A common stock, depository shares, purchase contracts, units or warrants in one or more offerings. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Classes of Capital Stock Mastercard’s amended and restated certificate of incorporation authorizes the following classes of capital stock: Class Par Value Per Share Authorized Shares (in millions) Dividend and Voting Rights A $0.0001 3,000 One vote per share B $0.0001 1,200 Non-voting Preferred $0.0001 300 No shares issued or outstanding at December 31, 2018 and 2017, respectively. Dividend and voting rights are to be determined by the Board of Directors of the Company upon issuance. Ownership and Governance Structure Equity ownership and voting power of the Company’s shares were allocated as follows as of December 31 : 2018 2017 Equity Ownership General Voting Power Equity Ownership General Voting Power Public Investors (Class A stockholders) 88.0 % 89.0 % 88.0 % 89.2 % Principal or Affiliate Customers (Class B stockholders) 1.1 % — % 1.4 % — % Mastercard Foundation (Class A stockholders) 10.9 % 11.0 % 10.6 % 10.8 % Class B Common Stock Conversions Shares of Class B common stock are convertible on a one-for-one basis into shares of Class A common stock. Entities eligible to hold Mastercard’s Class B common stock are defined in the Company’s amended and restated certificate of incorporation (generally the Company’s principal or affiliate customers), and they are restricted from retaining ownership of shares of Class A common stock. Class B stockholders are required to subsequently sell or otherwise transfer any shares of Class A common stock received pursuant to such a conversion. Mastercard Foundation In connection and simultaneously with its 2006 initial public offering (the “IPO”), the Company issued and donated 135 million newly authorized shares of Class A common stock to Mastercard Foundation. Mastercard Foundation is a private charitable foundation incorporated in Canada that is controlled by directors who are independent of the Company and its principal customers. Under the terms of the donation, Mastercard Foundation became able to resell the donated shares in May 2010 to the extent necessary to meet charitable disbursement requirements dictated by Canadian tax law. Under Canadian tax law, Mastercard Foundation is generally required to disburse at least 3.5% of its assets not used in administration each year for qualified charitable disbursements. However, Mastercard Foundation obtained permission from the Canadian tax authorities to defer the giving requirements until 2021. Mastercard Foundation, at its discretion, may decide to meet its disbursement obligations on an annual basis or to settle previously accumulated obligations during any given year. Mastercard Foundation will be permitted to sell all of its remaining shares beginning May 1, 2027, subject to certain conditions. Stock Repurchase Programs The Company’s Board of Directors have approved share repurchase programs authorizing the Company to repurchase shares of its Class A Common Stock. These programs become effective after the completion of the previously authorized share repurchase program. The following table summarizes the Company’s share repurchase authorizations of its Class A common stock through December 31, 2018 , as well as historical purchases: Board authorization dates December December December December 2015 December 2014 Date program became effective January 2019 March 2018 April 2017 February 2016 January 2015 Total (in millions, except average price data) Board authorization $ 6,500 $ 4,000 $ 4,000 $ 4,000 $ 3,750 $ 22,250 Dollar-value of shares repurchased in 2016 $ — $ — $ — $ 3,004 $ 507 $ 3,511 Remaining authorization at December 31, 2016 $ — $ — $ 4,000 $ 996 $ — $ 4,996 Dollar-value of shares repurchased in 2017 $ — $ — $ 2,766 $ 996 $ — $ 3,762 Remaining authorization at December 31, 2017 $ — $ 4,000 $ 1,234 $ — $ — $ 5,234 Dollar-value of shares repurchased in 2018 $ — $ 3,699 $ 1,234 $ — $ — $ 4,933 Remaining authorization at December 31, 2018 $ 6,500 $ 301 $ — $ — $ — $ 6,801 Shares repurchased in 2016 — — — 31.2 5.7 36.9 Average price paid per share in 2016 $ — $ — $ — $ 96.15 $ 89.76 $ 95.18 Shares repurchased in 2017 — — 21.0 9.1 — 30.1 Average price paid per share in 2017 $ — $ — $ 131.97 $ 109.16 $ — $ 125.05 Shares repurchased in 2018 — 19.0 7.2 — — 26.2 Average price paid per share in 2018 $ — $ 194.77 $ 171.11 $ — $ — $ 188.26 Cumulative shares repurchased through December 31, 2018 — 19.0 28.2 40.4 40.8 128.4 Cumulative average price paid per share $ — $ 194.77 $ 141.99 $ 99.10 $ 92.03 $ 120.44 The following table presents the changes in the Company’s outstanding Class A and Class B common stock for the years ended December 31 : Outstanding Shares Class A Class B (in millions) Balance at December 31, 2015 1,095.0 21.3 Purchases of treasury stock (36.9 ) — Share-based payments 2.3 — Conversion of Class B to Class A common stock 2.0 (2.0 ) Balance at December 31, 2016 1,062.4 19.3 Purchases of treasury stock (30.1 ) — Share-based payments 2.2 — Conversion of Class B to Class A common stock 5.2 (5.2 ) Balance at December 31, 2017 1,039.7 14.1 Purchases of treasury stock (26.2 ) — Share-based payments 2.8 — Conversion of Class B to Class A common stock 2.3 (2.3 ) Balance at December 31, 2018 1,018.6 11.8 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The changes in the balances of each component of accumulated other comprehensive income (loss), net of tax, for the years ended December 31, 2018 and 2017 were as follows: Foreign Currency Translation Adjustments 1 Translation Adjustments on Net Investment Hedge Defined Benefit Pension and Other Postretirement Plans 2 Investment Securities Available-for-Sale 3 Accumulated Other Comprehensive Income (Loss) (in millions) Balance at December 31, 2016 $ (949 ) $ 12 $ 11 $ 2 $ (924 ) Other comprehensive income (loss) 567 (153 ) 14 (1 ) 427 Balance at December 31, 2017 (382 ) (141 ) 25 1 (497 ) Other comprehensive income (loss) (279 ) 75 (15 ) (2 ) (221 ) Balance at December 31, 2018 $ (661 ) $ (66 ) $ 10 $ (1 ) $ (718 ) 1 During 2017, the decrease in the accumulated other comprehensive loss related to foreign currency translation adjustments was driven primarily by the appreciation of the euro. During 2018, the increase in the accumulated other comprehensive loss related to foreign currency translation adjustments was driven primarily by the devaluation of the euro, British pound and Brazilian real. 2 During 2017, the increase in the accumulated other comprehensive gain related to the Company’s postretirement plans was driven primarily by the addition of the Vocalink Plan. Deferred gains related to the Company’s postretirement plans, reclassified from accumulated other comprehensive income (loss) to earnings, were $2 million before tax and $1 million after tax. During 2018, the decrease in the accumulated other comprehensive gain related to the Company’s postretirement plans was driven primarily by an actuarial loss related to the Vocalink Plan. Deferred gains related to the Company’s postretirement plans, reclassified from accumulated other comprehensive income (loss) to earnings, were $1 million before and after tax. See Note 13 (Pension, Postretirement and Savings Plans) for additional information. 3 During 2017 and 2018, gains and losses on available-for-sale investment securities, reclassified from accumulated other comprehensive income (loss) to investment income, were not significant. |
Share-Based Payment and Other B
Share-Based Payment and Other Benefits | 12 Months Ended |
Dec. 31, 2018 | |
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | |
Share-Based Payment and Other Benefits | Share-Based Payments In May 2006, the Company implemented the Mastercard Incorporated 2006 Long Term Incentive Plan, which was amended and restated as of June 5, 2012 (the “LTIP”). The LTIP is a stockholder-approved plan that permits the grant of various types of equity awards to employees. The Company has granted Options, RSUs and PSUs under the LTIP. The Options, which expire ten years from the date of grant, generally vest ratably over four years from the date of grant. The RSUs and PSUs generally vest after three years . The Company uses the straight-line method of attribution for expensing equity awards. Compensation expense is recorded net of estimated forfeitures. Estimates are adjusted as appropriate. For all awards granted prior to March 2017, a participant’s unvested awards are forfeited upon termination of employment. For all awards granted on or after March 1, 2017, in the event of termination due to job elimination (as defined by the Company), a participant will retain a pro-rata portion of the unvested awards for services performed through the date of termination. In the event a participant terminates employment due to disability or retirement more than six months ( seven months for those granted on or after March 1, 2017) after receiving the award, the participant retains all of their awards without providing additional service to the Company. Retirement eligibility is dependent upon age and years of service. Compensation expense is recognized over the shorter of the vesting periods stated in the LTIP or the date the individual becomes eligible to retire but not less than six months (or seven months for grants awarded on or after March 1, 2017). There are approximately 116 million shares of Class A common stock authorized for equity awards under the LTIP. Although the LTIP permits the issuance of shares of Class B common stock, no such shares have been authorized for issuance. Shares issued as a result of Option exercises and the conversions of RSUs and PSUs were funded primarily with the issuance of new shares of Class A common stock. Stock Options The fair value of each Option is estimated on the date of grant using a Black-Scholes option pricing model. The following table presents the weighted-average assumptions used in the valuation and the resulting weighted-average fair value per option granted for the years ended December 31: 2018 2017 2016 Risk-free rate of return 2.7 % 2.0 % 1.3 % Expected term (in years) 6.00 5.00 5.00 Expected volatility 19.7 % 19.3 % 23.3 % Expected dividend yield 0.6 % 0.8 % 0.8 % Weighted-average fair value per Option granted $ 40.90 $ 21.23 $ 18.58 The risk-free rate of return was based on the U.S. Treasury yield curve in effect on the date of grant. The expected term and the expected volatility were based on historical Mastercard information. The expected dividend yields were based on the Company’s expected annual dividend rate on the date of grant. The following table summarizes the Company’s option activity for the year ended December 31, 2018 : Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (in millions) (in years) (in millions) Outstanding at January 1, 2018 8.6 $ 77 Granted 0.9 $ 173 Exercised (1.8 ) $ 57 Forfeited/expired (0.1 ) $ 112 Outstanding at December 31, 2018 7.6 $ 93 6.4 $ 726 Exercisable at December 31, 2018 4.3 $ 72 5.2 $ 505 Options vested and expected to vest at December 31, 2018 7.6 $ 93 6.4 $ 723 As of December 31, 2018 , there was $34 million of total unrecognized compensation cost related to non-vested Options. The cost is expected to be recognized over a weighted-average period of 2.1 years . Restricted Stock Units The following table summarizes the Company’s RSU activity for the year ended December 31, 2018 : Units Weighted-Average Grant-Date Fair Value Aggregate Intrinsic Value (in millions) (in millions) Outstanding at January 1, 2018 4.1 $ 97 Granted 0.9 $ 171 Converted (1.1 ) $ 90 Forfeited (0.2 ) $ 110 Outstanding at December 31, 2018 3.7 $ 117 $ 702 RSUs expected to vest at December 31, 2018 3.6 $ 116 $ 680 The fair value of each RSU is the closing stock price on the New York Stock Exchange of the Company’s Class A common stock on the date of grant, adjusted for the exclusion of dividend equivalents. Upon vesting, a portion of the RSU award may be withheld to satisfy the minimum statutory withholding taxes. The remaining RSUs will be settled in shares of the Company’s Class A common stock after the vesting period. As of December 31, 2018 , there was $153 million of total unrecognized compensation cost related to non-vested RSUs. The cost is expected to be recognized over a weighted-average period of 1.7 years . Performance Stock Units The following table summarizes the Company’s PSU activity for the year ended December 31, 2018 : Units Weighted-Average Grant-Date Fair Value Aggregate Intrinsic Value (in millions) (in millions) Outstanding at January 1, 2018 0.5 $ 105 Granted 0.1 $ 226 Converted (0.3 ) $ 99 Other 1 0.3 $ 94 Outstanding at December 31, 2018 0.6 $ 120 $ 119 PSUs expected to vest at December 31, 2018 0.6 $ 119 $ 118 1 Represents additional shares issued in March 2018 related to the 2015 PSU grant based on performance and market conditions achieved over the three-year measurement period. These shares vested upon issuance. Since 2013, PSUs containing performance and market conditions have been issued. Performance measures used to determine the actual number of shares that vest after three years include net revenue growth, EPS growth and relative total shareholder return (“TSR”). Relative TSR is considered a market condition, while net revenue and EPS growth are considered performance conditions. The Monte Carlo simulation valuation model is used to determine the grant-date fair value. Compensation expenses for PSUs are recognized over the requisite service period if it is probable that the performance target will be achieved and subsequently adjusted if the probability assessment changes. As of December 31, 2018 , there was $13 million of total unrecognized compensation cost related to non-vested PSUs. The cost is expected to be recognized over a weighted-average period of 1.3 years . Additional Information The following table includes additional share-based payment information for each of the years ended December 31: 2018 2017 2016 (in millions, except weighted-average fair value) Share-based compensation expense: Options, RSUs and PSUs $ 196 $ 176 $ 148 Income tax benefit recognized for equity awards 41 57 49 Income tax benefit realized related to Options exercised 53 36 31 Options: Total intrinsic value of Options exercised 242 106 86 RSUs: Weighted-average grant-date fair value of awards granted 171 112 91 Total intrinsic value of RSUs converted into shares of Class A common stock 194 131 122 PSUs: Weighted-average grant-date fair value of awards granted 226 126 92 Total intrinsic value of PSUs converted into shares of Class A common stock 40 13 25 |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Commitments At December 31, 2018 , the Company had the following future minimum payments due under non-cancelable agreements: Total Capital Operating Leases Sponsorship, Licensing & Other (in millions) 2019 $ 426 $ 4 $ 72 $ 350 2020 259 4 75 180 2021 175 — 76 99 2022 121 — 68 53 2023 67 — 58 9 Thereafter 327 — 327 — Total $ 1,375 $ 8 $ 676 $ 691 Included in the table above are capital leases with a net present value of minimum lease payments of $8 million . In addition, at December 31, 2018 , $25 million of the future minimum payments in the table above for sponsorship, licensing and other agreements was accrued. Consolidated rental expense for the Company’s leased office space was $94 million , $77 million and $62 million for 2018 , 2017 and 2016 , respectively. Consolidated lease expense for automobiles, computer equipment and office equipment was $20 million , $22 million and $19 million for 2018 , 2017 and 2016 , respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes On December 22, 2017, U.S. Tax Reform was enacted into law with the effective date for most provisions being January 1, 2018. U.S. Tax Reform represents significant changes to the U.S. internal revenue code and, among other things: • lowered the corporate income tax rate from 35% to 21% • imposed a one-time deemed repatriation tax on accumulated foreign earnings (the “Transition Tax”) • provides for a 100% dividends received deduction on dividends from foreign affiliates • requires a current inclusion in U.S. federal taxable income of earnings of foreign affiliates that are determined to be global intangible low taxed income or “GILTI” • creates the base erosion anti-abuse tax, or “BEAT” • provides for an effective tax rate of 13.125% for certain income derived from outside of the U.S. (referred to as foreign derived intangible income or “FDII”) • introduced further limitations on the deductibility of executive compensation • permits 100% expensing of qualifying fixed assets acquired after September 27, 2017 • limits the deductibility of interest expense in certain situations and • eliminates the domestic production activities deduction. While the effective date of the law for most provisions was January 1, 2018, GAAP requires the effects of changes in tax rates be accounted for in the reporting period of enactment, which was the 2017 reporting period. Components of Income and Income tax expense The domestic and foreign components of income before income taxes for the years ended December 31 are as follows: 2018 2017 2016 (in millions) United States $ 3,510 $ 3,482 $ 3,736 Foreign 3,694 3,040 1,910 Income before income taxes $ 7,204 $ 6,522 $ 5,646 The total income tax provision for the years ended December 31 is comprised of the following components: 2018 2017 2016 (in millions) Current Federal $ 649 $ 1,704 $ 1,074 State and local 69 65 36 Foreign 871 752 497 1,589 2,521 1,607 Deferred Federal (228 ) 134 (6 ) State and local (11 ) 1 (2 ) Foreign (5 ) (49 ) (12 ) (244 ) 86 (20 ) Income tax expense $ 1,345 $ 2,607 $ 1,587 Effective Income Tax Rate A reconciliation of the effective income tax rate to the U.S. federal statutory income tax rate for the years ended December 31, is as follows: 2018 2017 2016 Amount Percent Amount Percent Amount Percent (in millions, except percentages) Income before income taxes $ 7,204 $ 6,522 $ 5,646 Federal statutory tax 1,513 21.0 % 2,283 35.0 % 1,976 35.0 % State tax effect, net of federal benefit 46 0.6 % 43 0.7 % 22 0.4 % Foreign tax effect (92 ) (1.3 )% (380 ) (5.8 )% (188 ) (3.3 )% European Commission fine 194 2.7 % — — % — — % Foreign tax credits 1 (110 ) (1.5 )% (27 ) (0.4 )% (141 ) (2.5 )% Transition Tax 22 0.3 % 629 9.6 % — — % Remeasurement of deferred taxes (7 ) (0.1 )% 157 2.4 % — — % Windfall benefit (72 ) (1.0 )% (43 ) (0.7 )% — — % Other, net (149 ) (2.0 )% (55 ) (0.8 )% (82 ) (1.5 )% Income tax expense $ 1,345 18.7 % $ 2,607 40.0 % $ 1,587 28.1 % 1 Included within the impact of the 2018 foreign tax credits is a $90 million tax benefit relating to the carryback of certain foreign tax credits. Additionally, included in 2016 is a $116 million benefit associated with the repatriation of 2016 foreign earnings. There was no benefit associated with the repatriation of foreign earnings in 2018 and 2017 due to the enactment of U.S. Tax Reform. The effective tax rates for the years ended December 31, 2018, 2017 and 2016 were 18.7% , 40.0% and 28.1% , respectively. The effective income tax rate for 2018 was lower than the effective income tax rate for 2017 primarily due to additional tax expense of $873 million attributable to U.S. Tax Reform in 2017, a lower 2018 statutory tax rate in the U.S. and Belgium and a more favorable geographic mix of earnings. The lower effective tax rate is also attributable to discrete tax benefits, relating primarily to $90 million of foreign tax credits generated in 2018, which can be carried back and utilized in 2017 under transition rules in the proposed foreign tax credit regulations issued on November 28, 2018, along with provisions for legal matters in the United States. These benefits were partially offset by the nondeductible nature of the fine issued by the European Commission. See Note 20 (Legal and Regulatory Proceedings) for further discussion of the European Commission fine and U.S. merchant class litigation. The impact of U.S. Tax Reform for the period ending December 31, 2018 resulted in a net $75 million non-recurring tax benefit due to the carry back of certain foreign tax credits, incremental transition tax and the remeasurement of deferred taxes. The effective income tax rate for 2017 was higher than the effective income tax rate for 2016 primarily due to additional tax expense of $873 million attributable to U.S. Tax reform, which included provisional amounts of $825 million related to the Transition Tax, the remeasurement of the Company’s net deferred tax asset balance in the U.S. and the recognition of a deferred tax liability related to a change in assertion regarding the indefinite reinvestment of a substantial amount of the Company’s foreign earnings, as well as $48 million due to a foregone foreign tax credit benefit on 2017 repatriations. In addition, the Company’s 2017 effective income tax rate versus 2016 was impacted by a more favorable geographic mix of earnings in 2017, partially offset by a lower U.S. foreign tax credit benefit. SAB 118 The Company was able to make reasonable estimates at December 31, 2017 and had recorded a provisional charge of $629 million related to the Transition Tax, $157 million for the remeasurement of the Company’s net deferred tax asset in the U.S. and $36 million related to the change in assertion regarding the indefinite reinvestment of foreign earnings. However, these amounts were adjusted during the measurement period due to evolving analysis and interpretations of law, including issuance by the Internal Revenue Service (the “IRS”) and Treasury of Notices and regulations, discussions with the Department of Treasury (“Treasury”), as well as interpretations of how accounting for income taxes should be applied. At the close of the measurement period, the Company has finalized its assessment of the impact of U.S. Tax Reform resulting in a Transition Tax liability of $687 million and a $150 million charge related to the remeasurement of the Company’s net deferred tax assets in the U.S. In 2018, the Company recorded an increase in the transition tax liability of $36 million , with an offsetting decrease to its deferred tax liabilities. The Company recorded additional Transition Tax expense of $22 million and has recorded a $7 million reduction to the charge for the remeasurement of its net deferred tax assets. The adjustments in 2018 were primarily the result of additional administrative guidance and proposed regulations issued by the IRS and Treasury. The Transition Tax will be paid over eight annual installments. The initial installment of $55 million was due and paid by April 15, 2018. Additionally, the overpayment appearing on the 2017 U.S. federal tax return has been applied against the Company’s Transition Tax liability. Approximately $509 million of the remaining tax due is recorded in other liabilities on the consolidated balance sheet at December 31, 2018. At December 31, 2017 the Company had reflected a current liability of $52 million and an other liability of $577 million . Under U.S. Tax Reform, for purposes of IRS examination of the Transition Tax, the statute of limitations is extended to six years. Singapore Income Tax Rate In connection with the expansion of the Company’s operations in the Asia Pacific, Middle East and Africa region, the Company’s subsidiary in Singapore, Mastercard Asia Pacific Pte. Ltd. (“MAPPL”) received an incentive grant from the Singapore Ministry of Finance in 2010. The incentive had provided MAPPL with, among other benefits, a reduced income tax rate for the 10 -year period commencing January 1, 2010 on taxable income in excess of a base amount. The Company continued to explore business opportunities in this region, resulting in an expansion of the incentives being granted by the Ministry of Finance, including a further reduction to the income tax rate on taxable income in excess of a revised fixed base amount commencing July 1, 2011 and continuing through December 31, 2025. Without the incentive grant, MAPPL would have been subject to the statutory income tax rate on its earnings. For 2018, 2017 and 2016 , the impact of the incentive grant received from the Ministry of Finance resulted in a reduction of MAPPL’s income tax liability of $212 million , or $0.20 per diluted share, $104 million , or $0.10 per diluted share, and $49 million , or $0.04 per diluted share, respectively. Intra-entity asset transfers During 2014, the Company implemented an initiative to better align its legal entity and tax structure with its operational footprint outside of the U.S. This initiative resulted in a one-time taxable gain in Belgium relating to the transfer of intellectual property to a related foreign entity in the United Kingdom. The Company recorded a deferred charge related to the income tax expense on intercompany profits that resulted from the transfer. The tax associated with the transfer was deferred and amortized utilizing a 25 -year life. The deferred charge was included in other current assets and other assets on the consolidated balance sheet at December 31, 2017 in the amounts of $17 million and $352 million , respectively. The aforementioned deferred charge of $369 million at December 31, 2017 , was written off to retained earnings as a component of the cumulative-effect adjustment as of January 1, 2018. In addition, deferred taxes are a component of the cumulative-effect adjustment whereby the Company has recorded a $186 million deferred tax asset in this regard. See Note 1 (Summary of Significant Accounting Policies) for additional information related to this guidance. Indefinite Reinvestment In 2017, as a result of U.S. Tax Reform, among other things, the Company changed its assertion regarding the indefinite reinvestment of foreign earnings outside the U.S. for certain of our foreign affiliates and recognized a provisional deferred tax liability of $36 million . In 2018, the Company completed its analysis of global working capital and cash needs. It is the Company’s present intention to indefinitely reinvest a portion of its historic undistributed accumulated earnings associated with certain foreign subsidiaries outside of the U.S. As part of its analysis, the Company determined that approximately $5.8 billion of the approximately $6.7 billion of unremitted foreign earnings as of December 31, 2017, were no longer permanently reinvested. Notwithstanding the fact that some earnings continue to be permanently reinvested, all historical earnings, approximately $7.0 billion , were taxed in the U.S. as part of transition tax pursuant to U.S. Tax Reform, of which $267 million was repatriated in 2017. Additionally, during 2018, the Company repatriated approximately $3.3 billion . As of December 31, 2018, the Company had approximately $2.5 billion of accumulated earnings to be repatriated in the future, for which $8 million of deferred tax benefit was recorded. The tax effect is primarily related to the estimated foreign exchange impact recognized when earnings are repatriated. The Company expects that foreign withholding taxes associated with these future repatriated earnings will not be material. Earnings of approximately $0.9 billion remain permanently reinvested and the Company estimates that an immaterial U.S. federal and state and local income tax benefit would result, primarily from foreign exchange, if these earnings were to be repatriated. Deferred Taxes Deferred tax assets and liabilities represent the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. The components of deferred tax assets and liabilities at December 31 are as follows: 2018 2017 (in millions) Deferred Tax Assets Accrued liabilities $ 297 $ 158 Compensation and benefits 210 127 State taxes and other credits 30 28 Net operating and capital losses 104 105 Unrealized gain/loss - 2015 Euro Notes 28 48 Recoverable basis of deconsolidated entities — 35 Intangible assets 1 170 — Previously taxed earnings and profits 7 — Other items 80 83 Less: Valuation allowance (94 ) (91 ) Total Deferred Tax Assets 832 493 Deferred Tax Liabilities Prepaid expenses and other accruals 89 48 Intangible assets 125 151 Property, plant and equipment 97 83 Previously taxed earnings and profits — 36 Other items 18 31 Total Deferred Tax Liabilities 329 349 Net Deferred Tax Assets $ 503 $ 144 1 On January 1, 2018 a $186 million deferred tax asset was established related to intra-entity transfers as discussed above. Both the 2018 and 2017 valuation allowances relate primarily to the Company’s ability to recognize tax benefits associated with certain foreign net operating losses. The recognition of the foreign losses is dependent upon the future taxable income in such jurisdictions and the ability under tax law in these jurisdictions to utilize net operating losses following a change in control. A reconciliation of the beginning and ending balance for the Company’s unrecognized tax benefits for the years ended December 31 , is as follows: 2018 2017 2016 (in millions) Beginning balance $ 183 $ 169 $ 181 Additions: Current year tax positions 23 21 20 Prior year tax positions 5 9 13 Reductions: Prior year tax positions (17 ) (1 ) (28 ) Settlements with tax authorities (18 ) (4 ) (2 ) Expired statute of limitations (12 ) (11 ) (15 ) Ending balance $ 164 $ 183 $ 169 The entire unrecognized tax benefit of $164 million , if recognized, would reduce the effective tax rate. During 2018, there was a reduction to the balance of the Company’s unrecognized tax benefits. This was primarily due to a favorable court decision and settlements with tax authorities in multiple jurisdictions. Further, the information gained related to these matters was considered in measuring uncertain tax benefits recognized for the periods subsequent to the periods settled. The Company is subject to tax in the U.S., Belgium, Singapore, the United Kingdom and various other foreign jurisdictions, as well as state and local jurisdictions. Uncertain tax positions are reviewed on an ongoing basis and are adjusted after considering facts and circumstances, including progress of tax audits, developments in case law and closing of statutes of limitation. Within the next twelve months, the Company believes that the resolution of certain federal, foreign and state and local examinations are reasonably possible and that a change in estimate, reducing unrecognized tax benefits, may occur. While such a change may be significant, it is not possible to provide a range of the potential change until the examinations progress further or the related statutes of limitation expire. The Company has effectively settled its U.S. federal income tax obligations through 2011. With limited exception, the Company is no longer subject to state and local or foreign examinations by tax authorities for years before 2010. At December 31, 2018 and 2017 , the Company had a net income tax-related interest payable of $8 million and $10 million , respectively, in its consolidated balance sheet. Tax-related interest income /(expense) in the periods 2018 , 2017 and 2016, were not material. In addition, as of December 31, 2018 and 2017 , the amounts the Company has recognized for penalties payable in its consolidated balance sheet were not material. |
Legal and Regulatory Proceeding
Legal and Regulatory Proceedings | 12 Months Ended |
Dec. 31, 2018 | |
Legal and Regulatory Proceedings [Abstract] | |
Legal and Regulatory Proceedings | Legal and Regulatory Proceedings Mastercard is a party to legal and regulatory proceedings with respect to a variety of matters in the ordinary course of business. Some of these proceedings are based on complex claims involving substantial uncertainties and unascertainable damages. Accordingly, except as discussed below, it is not possible to determine the probability of loss or estimate damages, and therefore, Mastercard has not established reserves for any of these proceedings. When the Company determines that a loss is both probable and reasonably estimable, Mastercard records a liability and discloses the amount of the liability if it is material. When a material loss contingency is only reasonably possible, Mastercard does not record a liability, but instead discloses the nature and the amount of the claim, and an estimate of the loss or range of loss, if such an estimate can be made. Unless otherwise stated below with respect to these matters, Mastercard cannot provide an estimate of the possible loss or range of loss based on one or more of the following reasons: (1) actual or potential plaintiffs have not claimed an amount of monetary damages or the amounts are unsupportable or exaggerated, (2) the matters are in early stages, (3) there is uncertainty as to the outcome of pending appeals or motions, (4) there are significant factual issues to be resolved, (5) the existence in many such proceedings of multiple defendants or potential defendants whose share of any potential financial responsibility has yet to be determined and/or (6) there are novel legal issues presented. Furthermore, except as identified with respect to the matters below, Mastercard does not believe that the outcome of any individual existing legal or regulatory proceeding to which it is a party will have a material adverse effect on its results of operations, financial condition or overall business. However, an adverse judgment or other outcome or settlement with respect to any proceedings discussed below could result in fines or payments by Mastercard and/or could require Mastercard to change its business practices. In addition, an adverse outcome in a regulatory proceeding could lead to the filing of civil damage claims and possibly result in significant damage awards. Any of these events could have a material adverse effect on Mastercard’s results of operations, financial condition and overall business. Interchange Litigation and Regulatory Proceedings Mastercard’s interchange fees and other practices are subject to regulatory, legal review and/or challenges in a number of jurisdictions, including the proceedings described below. When taken as a whole, the resulting decisions, regulations and legislation with respect to interchange fees and acceptance practices may have a material adverse effect on the Company’s prospects for future growth and its overall results of operations, financial position and cash flows. United States. In June 2005, the first of a series of complaints were filed on behalf of merchants (the majority of the complaints were styled as class actions, although a few complaints were filed on behalf of individual merchant plaintiffs) against Mastercard International, Visa U.S.A., Inc., Visa International Service Association and a number of financial institutions. Taken together, the claims in the complaints were generally brought under both Sections 1 and 2 of the Sherman Act, which prohibit monopolization and attempts or conspiracies to monopolize a particular industry, and some of these complaints contain unfair competition law claims under state law. The complaints allege, among other things, that Mastercard, Visa, and certain financial institutions conspired to set the price of interchange fees, enacted point of sale acceptance rules (including the no surcharge rule) in violation of antitrust laws and engaged in unlawful tying and bundling of certain products and services. The cases were consolidated for pre-trial proceedings in the U.S. District Court for the Eastern District of New York in MDL No. 1720. The plaintiffs filed a consolidated class action complaint that seeks treble damages. In July 2006, the group of purported merchant class plaintiffs filed a supplemental complaint alleging that Mastercard’s initial public offering of its Class A Common Stock in May 2006 (the “IPO”) and certain purported agreements entered into between Mastercard and financial institutions in connection with the IPO: (1) violate U.S. antitrust laws and (2) constituted a fraudulent conveyance because the financial institutions allegedly attempted to release, without adequate consideration, Mastercard’s right to assess them for Mastercard’s litigation liabilities. The class plaintiffs sought treble damages and injunctive relief including, but not limited to, an order reversing and unwinding the IPO. In February 2011, Mastercard and Mastercard International entered into each of: (1) an omnibus judgment sharing and settlement sharing agreement with Visa Inc., Visa U.S.A. Inc. and Visa International Service Association and a number of financial institutions; and (2) a Mastercard settlement and judgment sharing agreement with a number of financial institutions. The agreements provide for the apportionment of certain costs and liabilities which Mastercard, the Visa parties and the financial institutions may incur, jointly and/or severally, in the event of an adverse judgment or settlement of one or all of the cases in the merchant litigations. Among a number of scenarios addressed by the agreements, in the event of a global settlement involving the Visa parties, the financial institutions and Mastercard, Mastercard would pay 12% of the monetary portion of the settlement. In the event of a settlement involving only Mastercard and the financial institutions with respect to their issuance of Mastercard cards, Mastercard would pay 36% of the monetary portion of such settlement. In October 2012, the parties entered into a definitive settlement agreement with respect to the merchant class litigation (including with respect to the claims related to the IPO) and the defendants separately entered into a settlement agreement with the individual merchant plaintiffs. The settlements included cash payments that were apportioned among the defendants pursuant to the omnibus judgment sharing and settlement sharing agreement described above. Mastercard also agreed to provide class members with a short-term reduction in default credit interchange rates and to modify certain of its business practices, including its “no surcharge” rule. The court granted final approval of the settlement in December 2013, and objectors to the settlement appealed that decision to the U.S. Court of Appeals for the Second Circuit. In June 2016, the court of appeals vacated the class action certification, reversed the settlement approval and sent the case back to the district court for further proceedings. The court of appeals’ ruling was based primarily on whether the merchants were adequately represented by counsel in the settlement. As a result of the appellate court ruling, the district court divided the merchants’ claims into two separate classes - monetary damages claims (the “Damages Class”) and claims seeking changes to business practices (the “Rules Relief Class”). The court appointed separate counsel for each class. Prior to the reversal of the settlement approval, merchants representing slightly more than 25% of the Mastercard and Visa purchase volume over the relevant period chose to opt out of the class settlement. Mastercard had anticipated that most of the larger merchants who opted out of the settlement would initiate separate actions seeking to recover damages, and over 30 opt-out complaints have been filed on behalf of numerous merchants in various jurisdictions. Mastercard has executed settlement agreements with a number of opt-out merchants. Mastercard believes these settlement agreements are not impacted by the ruling of the court of appeals. The defendants have consolidated all of these matters in front of the same federal district court that approved the merchant class settlement. In July 2014, the district court denied the defendants’ motion to dismiss the opt-out merchant complaints for failure to state a claim. In September 2018, the parties to the Damages Class litigation entered into a class settlement agreement to resolve the Damages Class claims. Mastercard increased its reserve by $237 million during 2018 to reflect both its expected financial obligation under the Damages Class settlement agreement and the filed and anticipated opt-out merchant cases. In January 2019, the district court issued an order granting preliminary approval of the settlement and authorized notice of the settlement to class members. Damages Class members will now have the opportunity to opt out of the class settlement agreement, after which the district court will schedule a hearing on final approval. The settlement agreement does not relate to the Rules Relief Class claims. Separate settlement negotiations with the Rules Relief Class are ongoing. As of December 31, 2018 and 2017 , Mastercard had accrued a liability of $915 million and $708 million , respectively, as a reserve for both the merchant class litigation and the filed and anticipated opt-out merchant cases. As of December 31, 2018 and 2017 , Mastercard had $553 million and $546 million , respectively, in a qualified cash settlement fund related to the merchant class litigation and classified as restricted cash on its consolidated balance sheet. Mastercard believes the reserve for both the merchant class litigation and the filed and anticipated opt-out merchants represents its best estimate of its probable liabilities in these matters. The portion of the accrued liability relating to both the opt-out merchants and the merchant class litigation settlement does not represent an estimate of a loss, if any, if the matters were litigated to a final outcome. Mastercard cannot estimate the potential liability if that were to occur. Canada . In December 2010, a proposed class action complaint was commenced against Mastercard in Quebec on behalf of Canadian merchants. The suit essentially repeated the allegations and arguments of a previously filed application by the Canadian Competition Bureau to the Canadian Competition Tribunal (dismissed in Mastercard’s favor) concerning certain Mastercard rules related to point-of-sale acceptance, including the “honor all cards” and “no surcharge” rules. The Quebec suit sought compensatory and punitive damages in unspecified amounts, as well as injunctive relief. In the first half of 2011, additional purported class action lawsuits were commenced in British Columbia and Ontario against Mastercard, Visa and a number of large Canadian financial institutions. The British Columbia suit sought compensatory damages in unspecified amounts, and the Ontario suit sought compensatory damages of $5 billion on the basis of alleged conspiracy and various alleged breaches of the Canadian Competition Act. Additional purported class action complaints were commenced in Saskatchewan and Alberta with claims that largely mirror those in the other suits. In June 2017, Mastercard entered into a class settlement agreement to resolve all of the Canadian class action litigation. The settlement, which requires Mastercard to make a cash payment and modify its “no surcharge” rule, has received court approval in each Canadian province. Objectors to the settlement have sought to appeal the approval orders. In 2017, Mastercard recorded a provision for litigation of $15 million related to this matter. Europe. In July 2015, the European Commission (“EC”) issued a Statement of Objections related to Mastercard’s interregional interchange fees and central acquiring rule within the European Economic Area (the “EEA”). The Statement of Objections, which followed an investigation opened in 2013, included preliminary conclusions concerning the alleged anticompetitive effects of these practices. In December 2018, Mastercard announced the anticipated resolution of the EC’s investigation. With respect to interregional interchange fees, Mastercard made a settlement proposal whereby it would make changes to its interregional interchange fees. The proposed settlement is subject to market testing by the EC before it is made binding in an EC decision. The EC has announced that Visa has entered into a parallel proposed settlement. In addition, with respect to Mastercard’s historic central acquiring rule, the EC issued a negative decision in January 2019. The EC’s negative decision covers a period of time of less than two years before the rule’s modification. The rule was modified in late 2015 to comply with the requirements of the EEA Interchange Fee Regulation. The decision does not require any modification of Mastercard’s current business practices but includes a fine of €571 million . Mastercard incurred a charge of $654 million in the fourth quarter of 2018 in relation to this matter. Since May 2012, a number of United Kingdom (“U.K.”) retailers filed claims or threatened litigation against Mastercard seeking damages for alleged anti-competitive conduct with respect to Mastercard’s cross-border interchange fees and its U.K. and Ireland domestic interchange fees (the “U.K. Merchant claimants”). In addition, Mastercard, has faced similar filed or threatened litigation by merchants with respect to interchange rates in other countries in Europe (the “Pan-European Merchant claimants”). In aggregate, the alleged damages claims from the U.K. and Pan-European Merchant claimants were in the amount of approximately £3 billion (approximately $4 billion as of December 31, 2018 ). Mastercard has resolved over £2 billion (approximately $3 billion as of December 31, 2018 ) of these damages claims through settlement or judgment. Since June 2015, Mastercard has recorded litigation provisions for settlements, judgments and legal fees relating to these claims, including charges of $237 million and $117 million in 2018 and 2016, respectively. There were no litigation charges relating to U.K. and Pan-European Merchant claimants in 2017. As detailed below, Mastercard continues to litigate with the remaining U.K. and Pan-European Merchant claimants and it has submitted statements of defense disputing liability and damages claims. In January 2017, Mastercard received a liability judgment in its favor on all significant matters in a separate action brought by ten of the U.K. Merchant claimants. Three of the U.K. Merchant claimants appealed the judgment, and these appeals were combined with Mastercard’s appeal of a 2016 judgment in favor of one U.K. merchant. In July 2018, the U.K. appellate court ruled against both Mastercard and Visa on two of the three legal issues being considered, concluding that U.K. interchange rates restricted competition and that they were not objectively necessary for the payment networks. The appellate court sent the cases back to trial for reconsideration on the remaining issue concerning the “lawful” level of interchange. Mastercard and Visa have been granted permission to appeal the appellate court ruling to the U.K. Supreme Court. Mastercard expects the litigation process to be delayed pending the resolution of its appeal to the U.K. Supreme Court. In September 2016, a proposed collective action was filed in the United Kingdom on behalf of U.K. consumers seeking damages for intra-EEA and domestic U.K. interchange fees that were allegedly passed on to consumers by merchants between 1992 and 2008. The complaint, which seeks to leverage the European Commission’s 2007 decision on intra-EEA interchange fees, claims damages in an amount that exceeds £14 billion (approximately $18 billion as of December 31, 2018 ). In July 2017, the court denied the plaintiffs’ application for the case to proceed as a collective action. The plaintiffs were granted permission to appeal the denial of their collective action application and the appellate court heard an oral argument on the appeal in February 2019. ATM Non-Discrimination Rule Surcharge Complaints In October 2011, a trade association of independent Automated Teller Machine (“ATM”) operators and 13 independent ATM operators filed a complaint styled as a class action lawsuit in the U.S. District Court for the District of Columbia against both Mastercard and Visa (the “ATM Operators Complaint”). Plaintiffs seek to represent a class of non-bank operators of ATM terminals that operate in the United States with the discretion to determine the price of the ATM access fee for the terminals they operate. Plaintiffs allege that Mastercard and Visa have violated Section 1 of the Sherman Act by imposing rules that require ATM operators to charge non-discriminatory ATM surcharges for transactions processed over Mastercard’s and Visa’s respective networks that are not greater than the surcharge for transactions over other networks accepted at the same ATM. Plaintiffs seek both injunctive and monetary relief equal to treble the damages they claim to have sustained as a result of the alleged violations and their costs of suit, including attorneys’ fees. Plaintiffs have not quantified their damages although they allege that they expect damages to be in the tens of millions of dollars. Subsequently, multiple related complaints were filed in the U.S. District Court for the District of Columbia alleging both federal antitrust and multiple state unfair competition, consumer protection and common law claims against Mastercard and Visa on behalf of putative classes of users of ATM services (the “ATM Consumer Complaints”). The claims in these actions largely mirror the allegations made in the ATM Operators Complaint, although these complaints seek damages on behalf of consumers of ATM services who pay allegedly inflated ATM fees at both bank and non-bank ATM operators as a result of the defendants’ ATM rules. Plaintiffs seek both injunctive and monetary relief equal to treble the damages they claim to have sustained as a result of the alleged violations and their costs of suit, including attorneys’ fees. Plaintiffs have not quantified their damages although they allege that they expect damages to be in the tens of millions of dollars. In January 2012, the plaintiffs in the ATM Operators Complaint and the ATM Consumer Complaints filed amended class action complaints that largely mirror their prior complaints. In February 2013, the district court granted Mastercard’s motion to dismiss the complaints for failure to state a claim. On appeal, the Court of Appeals reversed the district court’s order in August 2015 and sent the case back for further proceedings. U.S. Liability Shift Litigation In March 2016, a proposed U.S. merchant class action complaint was filed in federal court in California alleging that Mastercard, Visa, American Express and Discover (the “Network Defendants”), EMVCo and a number of issuing banks (the “Bank Defendants”) engaged in a conspiracy to shift fraud liability for card present transactions from issuing banks to merchants not yet in compliance with the standards for EMV chip cards in the United States (the “EMV Liability Shift”), in violation of the Sherman Act and California law. Plaintiffs allege damages equal to the value of all chargebacks for which class members became liable as a result of the EMV Liability Shift on October 1, 2015. The plaintiffs seek treble damages, attorney’s fees and costs and an injunction against future violations of governing law, and the defendants have filed a motion to dismiss. In September 2016, the court denied the Network Defendants’ motion to dismiss the complaint, but granted such a motion for EMVCo and the Bank Defendants. In May 2017, the court transferred the case to New York so that discovery could be coordinated with the U.S. merchant class interchange litigation described above. The plaintiffs have filed a renewed motion for class certification, following the district court’s denial of their initial motion. Telephone Consumer Protection Class Action Mastercard is a defendant in a Telephone Consumer Protection Act (“TCPA”) class action pending in Florida. The plaintiffs are individuals and businesses who allege that approximately 381,000 unsolicited faxes were sent to them advertising a Mastercard co-brand card issued by First Arkansas Bank (“FAB”). The TCPA provides for uncapped statutory damages of $500 per fax. Mastercard has asserted various defenses to the claims, and has notified FAB of an indemnity claim that it has (which FAB has disputed). In June 2018, the court granted Mastercard’s motion to stay the proceedings until the Federal Communications Commission makes a decision on the application of the TCPA to online fax services. |
Settlement and Other Risk Manag
Settlement and Other Risk Management | 12 Months Ended |
Dec. 31, 2018 | |
Settlement and Other Risk Management [Abstract] | |
Settlement and Other Risk Management | Settlement and Other Risk Management Mastercard’s rules guarantee the settlement of many of the transactions between its customers (“settlement risk”). Settlement exposure is the settlement risk to customers under Mastercard’s rules due to the difference in timing between the payment transaction date and subsequent settlement. While the term and amount of the guarantee are unlimited, the duration of settlement exposure is short term and typically limited to a few days. Gross settlement exposure is estimated using the average daily payment volume during the three months ended December 31, 2018 multiplied by the estimated number of days of exposure. The Company has global risk management policies and procedures, which include risk standards, to provide a framework for managing the Company’s settlement risk and exposure. In the event of a failed customer, Mastercard may pursue one or more remedies available under our rules to recover potential losses. Historically, the Company has experienced a low level of losses from customer failures. As part of its policies, Mastercard requires certain customers that are not in compliance with the Company’s risk standards to post collateral, typically in the form of cash, letters of credit, or guarantees. This requirement is based on a review of the individual risk circumstances for each customer. Mastercard monitors its credit risk portfolio on a regular basis and the adequacy of collateral on hand. Additionally, from time to time, the Company reviews its risk management methodology and standards. As such, the amounts of estimated settlement exposure are revised as necessary. The Company’s estimated settlement exposure was as follows: December 31, December 31, 2017 (in millions) Gross settlement exposure $ 49,666 $ 47,002 Collateral held for settlement exposure (4,711 ) (4,360 ) Net uncollateralized settlement exposure $ 44,955 $ 42,642 Mastercard also provides guarantees to customers and certain other counterparties indemnifying them from losses stemming from failures of third parties to perform duties. This includes guarantees of Mastercard-branded travelers cheques issued, but not yet cashed of $377 million and $395 million at December 31, 2018 and 2017 , respectively, of which $297 million and $313 million at December 31, 2018 and 2017 , respectively, is mitigated by collateral arrangements. In addition, the Company enters into agreements in the ordinary course of business under which the Company agrees to indemnify third parties against damages, losses and expenses incurred in connection with legal and other proceedings arising from relationships or transactions with the Company. Certain indemnifications do not provide a stated maximum exposure. As the extent of the Company’s obligations under these agreements depends entirely upon the occurrence of future events, the Company’s potential future liability under these agreements is not determinable. Historically, payments made by the Company under these types of contractual arrangements have not been material. |
Foreign Exchange Risk Managemen
Foreign Exchange Risk Management | 12 Months Ended |
Dec. 31, 2018 | |
Foreign Currency Derivatives [Abstract] | |
Foreign Exchange Risk Management | Foreign Exchange Risk Management The Company monitors and manages its foreign currency exposures as part of its overall risk management program which focuses on the unpredictability of financial markets and seeks to reduce the potentially adverse effects that the volatility of these markets may have on its operating results. A primary objective of the Company’s risk management strategies is to reduce the financial impact that may arise from volatility in foreign currency exchange rates principally through the use of both foreign currency derivative contracts (Derivatives) and foreign currency denominated debt (Net Investment Hedge). Derivatives The Company enters into foreign currency derivative contracts to manage risk associated with anticipated receipts and disbursements which are valued based on currencies other than the functional currencies of the entity. The Company may also enter into foreign currency derivative contracts to offset possible changes in value due to foreign exchange fluctuations of earnings, assets and liabilities. The objective of these activities is to reduce the Company’s exposure to gains and losses resulting from fluctuations of foreign currencies against its functional currencies. As of December 31, 2018 and 2017 , the majority of derivative contracts to hedge foreign currency fluctuations had been entered into with customers of Mastercard. Mastercard’s derivative contracts are summarized below: December 31, 2018 December 31, 2017 Notional Estimated Fair Value Notional Estimated Fair Value (in millions) Commitments to purchase foreign currency $ 34 $ (1 ) $ 27 $ — Commitments to sell foreign currency 1,066 26 968 (26 ) Options to sell foreign currency 25 4 27 2 Balance sheet location Accounts receivable 1 $ — $ 6 Prepaid expenses and other current assets 1 35 — Other current liabilities 1 (6 ) (30 ) 1 The derivative contracts are subject to enforceable master netting arrangements, which contain various netting and setoff provisions. The amount of gain (loss) recognized on the consolidated statement of operations for the contracts to purchase and sell foreign currency is summarized below: Year Ended December 31, 2018 2017 2016 (in millions) Foreign currency derivative contracts General and administrative $ 53 $ (75 ) $ (6 ) The fair value of the foreign currency derivative contracts generally reflects the estimated amounts that the Company would receive (or pay), on a pre-tax basis, to terminate the contracts. The terms of the foreign currency derivative contracts are generally less than 18 months . The Company had no deferred gains or losses related to foreign exchange contracts in accumulated other comprehensive income as of December 31, 2018 and 2017 , as these contracts were not accounted for under hedge accounting. The Company’s derivative financial instruments are subject to both market and counterparty credit risk. Market risk is the potential for economic losses to be incurred on market risk sensitive instruments arising from adverse changes in market factors such as foreign currency exchange rates, interest rates and other related variables. The effect of a hypothetical 10% adverse change in U.S. dollar forward rates could result in a fair value loss of approximately $113 million on the Company’s foreign currency derivative contracts outstanding at December 31, 2018 . Counterparty credit risk is the risk of loss due to failure of the counterparty to perform its obligations in accordance with contractual terms. To mitigate counterparty credit risk, the Company enters into derivative contracts with a diversified group of selected financial institutions based upon their credit ratings and other factors. Generally, the Company does not obtain collateral related to derivatives because of the high credit ratings of the counterparties. Net Investment Hedge The Company uses foreign currency denominated debt to hedge a portion of its net investment in foreign operations against adverse movements in exchange rates, with changes in the value of the debt recorded within currency translation adjustment in accumulated other comprehensive income (loss). In 2015, the Company designated its €1.65 billion euro-denominated debt as a net investment hedge for a portion of its net investment in European foreign operations. As of December 31, 2018 , the Company had a net foreign currency transaction pre-tax loss of $120 million in accumulated other comprehensive income (loss) associated with hedging activity. There was no ineffectiveness in the current period. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting Mastercard has concluded it has one operating and reportable segment, “Payment Solutions.” Mastercard’s President and Chief Executive Officer has been identified as the chief operating decision-maker. All of the Company’s activities are interrelated, and each activity is dependent upon and supportive of the other. Accordingly, all significant operating decisions are based upon analysis of Mastercard at the consolidated level. Revenue by geographic market is based on the location of the Company’s customer that issued the card, as well as the location of the merchant acquirer where the card is being used. Revenue generated in the U.S. was approximately 33% of total revenue in 2018 , 35% in 2017 and 38% in 2016 . No individual country, other than the U.S., generated more than 10% of total revenue in those periods. Mastercard did not have any individual customer that generated greater than 10% of net revenue in 2018 , 2017 or 2016 . The following table reflects the geographical location of the Company’s property, plant and equipment, net, as of December 31: 2018 2017 2016 (in millions) United States $ 613 $ 572 $ 504 Other countries 308 257 229 Total $ 921 $ 829 $ 733 |
SUMMARY OF QUARTERLY DATA (Unau
SUMMARY OF QUARTERLY DATA (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Data [Abstract] | |
SUMMARY OF QUARTERLY DATA (Unaudited) | MASTERCARD INCORPORATED SUMMARY OF QUARTERLY DATA (Unaudited) 2018 Quarter Ended March 31 June 30 September 30 December 31 2018 Total (in millions, except per share data) Net revenue $ 3,580 $ 3,665 $ 3,898 $ 3,807 $ 14,950 Operating income 1,825 1,936 2,287 1,234 7,282 Net income 1,492 1,569 1,899 899 5,859 Basic earnings per share $ 1.42 $ 1.50 $ 1.83 $ 0.87 $ 5.63 Basic weighted-average shares outstanding 1,051 1,043 1,037 1,032 1,041 Diluted earnings per share $ 1.41 $ 1.50 $ 1.82 $ 0.87 $ 5.60 Diluted weighted-average shares outstanding 1,057 1,049 1,043 1,038 1,047 2017 Quarter Ended March 31 June 30 September 30 December 31 2017 Total (in millions, except per share data) Net revenue $ 2,734 $ 3,053 $ 3,398 $ 3,312 $ 12,497 Operating income 1,506 1,653 1,941 1,522 6,622 Net income 1,081 1,177 1,430 227 3,915 Basic earnings per share $ 1.00 $ 1.10 $ 1.34 $ 0.21 $ 3.67 Basic weighted-average shares outstanding 1,078 1,070 1,063 1,057 1,067 Diluted earnings per share $ 1.00 $ 1.10 $ 1.34 $ 0.21 $ 3.65 Diluted weighted-average shares outstanding 1,082 1,075 1,068 1,063 1,072 Note: Tables may not sum due to rounding. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policy) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Organization | Organization Mastercard Incorporated and its consolidated subsidiaries, including Mastercard International Incorporated (“Mastercard International” and together with Mastercard Incorporated, “Mastercard” or the “Company”), is a technology company in the global payments industry that connects consumers, financial institutions, merchants, governments, digital partners, businesses and other organizations worldwide, enabling them to use electronic forms of payment instead of cash and checks. The Company makes payments easier and more efficient by creating a wide range of payment solutions and services through a family of well-known brands, including Mastercard®, Maestro® and Cirrus®. The Company is a multi-rail network. Through its core global payments processing network, Mastercard facilitates the switching (authorization, clearing and settlement) of payment transactions, and delivers related products and services. With additional payment capabilities that include real-time account based payments (including automated clearing house (“ACH”) transactions), Mastercard offers customers one partner to turn to for their payment needs for both domestic and cross-border transactions across multiple payment flows. The Company also provides value-added offerings such as safety and security products, information and analytics services, consulting, loyalty and reward programs and issuer and acquirer processing. The Company’s payment solutions are designed to ensure safety and security for the global payments system. A typical transaction on the Company’s core network involves four participants in addition to the Company: account holder (a consumer who holds a card or uses another device enabled for payment), issuer (the account holder’s financial institution), merchant and acquirer (the merchant’s financial institution). The Company does not issue cards, extend credit, determine or receive revenue from interest rates or other fees charged to account holders by issuers, or establish the rates charged by acquirers in connection with merchants’ acceptance of the Company’s branded products. In most cases, account holder relationships belong to, and are managed by, the Company’s financial institution customers. |
Consolidation and Basis of Presentation | Consolidation and basis of presentation - The consolidated financial statements include the accounts of Mastercard and its majority-owned and controlled entities, including any variable interest entities (“VIEs”) for which the Company is the primary beneficiary. Investments in VIEs for which the Company is not considered the primary beneficiary are not consolidated and are accounted for as equity method or cost method investments and recorded in other assets on the consolidated balance sheet. At December 31, 2018 and 2017 , there were no significant VIEs which required consolidation and the investments were not considered material to the consolidated financial statements. Intercompany transactions and balances have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the 2018 presentation. For 2017 and 2016, $127 million and $113 million , respectively, of expenses were reclassified from advertising and marketing expenses to general and administrative expenses. The reclassification had no impact on total operating expenses, operating income or net income. The Company follows accounting principles generally accepted in the United States of America (“GAAP”). Prior to December 31, 2017, the Company included the financial results from its Venezuela subsidiaries in the consolidated financial statements using the consolidation method of accounting. In 2017, due to foreign exchange regulations restricting access to U.S. dollars in Venezuela, an other-than-temporary lack of exchangeability between the Venezuelan bolivar and U.S. dollar impacted the Company’s ability to manage risk, process cross-border transactions and satisfy U.S. dollar denominated liabilities related to operations in Venezuela. As a result of these factors, Mastercard concluded that effective December 31, 2017, it did not meet the accounting criteria for consolidation of these Venezuelan subsidiaries, and therefore would transition to the cost method of accounting as of December 31, 2017. This accounting change resulted in a pre-tax charge of $167 million ( $108 million after tax or $0.10 per diluted share) that was recorded in general and administrative expenses on the consolidated statement of operations for the year ended December 31, 2017 . Non-controlling interests represent the equity interest not owned by the Company and are recorded for consolidated entities in which the Company owns less than 100% of the interests. Changes in a parent’s ownership interest while the parent retains its controlling interest are accounted for as equity transactions, and upon loss of control, retained ownership interests are remeasured at fair value, with any gain or loss recognized in earnings. For 2018, 2017 and 2016 , losses from non-controlling interests were de minimis and, as a result, amounts are included on the consolidated statement of operations within other income (expense). The Company accounts for investments in common stock or in-substance common stock under the equity method of accounting when it has the ability to exercise significant influence over the investee, generally when it holds between 20% and 50% ownership in the entity. In addition, investments in flow-through entities such as limited partnerships and limited liability companies are also accounted for under the equity method when the Company has the ability to exercise significant influence over the investee, generally when the investment ownership percentage is equal to or greater than 5% of the outstanding ownership interest. The excess of the cost over the underlying net equity of investments accounted for under the equity method is allocated to identifiable tangible and intangible assets and liabilities based on fair values at the date of acquisition. The amortization of the excess of the cost over the underlying net equity of investments and Mastercard’s share of net earnings or losses of entities accounted for under the equity method of accounting is included in other income (expense) on the consolidated statement of operations. The Company accounts for investments in common stock or in-substance common stock under the cost method of accounting when it does not exercise significant influence, generally when it holds less than 20% ownership in the entity or when the interest in a limited partnership or limited liability company is less than 5% and the Company has no significant influence over the operation of the investee. Investments in companies that Mastercard does not control, but that are not in the form of common stock or in-substance common stock, are also accounted for under the cost method of accounting. These investments for which there is no readily determinable fair value and the cost method of accounting is used are adjusted for changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. Investments for which the equity method or cost method of accounting is used are classified as nonmarketable equity investments and recorded in other assets on the consolidated balance sheet. |
Use of Estimates Policy | Use of estimates - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Future events and their effects cannot be predicted with certainty; accordingly, accounting estimates require the exercise of judgment. The accounting estimates used in the preparation of the Company’s consolidated financial statements may change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes. Actual results may differ from these estimates. |
Revenue Recognition Policy | Revenue recognition - Revenue is recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those goods or services. Revenue is generated by charging fees to issuers, acquirers and other stakeholders for providing switching services, as well as by assessing customers based primarily on the dollar volume of activity, or gross dollar volume, on the cards and other devices that carry the Company’s brands. Revenue is generally derived from transactional information accumulated by Mastercard’s systems or reported by customers. Volume-based revenue (domestic assessments and cross-border volume fees) is recorded as revenue in the period it is earned, which is when the related volume is generated on the cards. Certain volume-based revenue is based upon information reported by customers. Transaction-based revenue is primarily based on the number and type of transactions and is recognized as revenue in the same period in which the related transactions occur. Other payment-related products and services are recognized as revenue in the period in which the related services are performed or transactions occur. Mastercard has business agreements with certain customers that provide for rebates or other support when the customers meet certain volume hurdles as well as other support incentives such as marketing, which are tied to performance. Rebates and incentives are recorded as a reduction of revenue primarily when volume- and transaction-based revenues are recognized over the contractual term. Rebates and incentives are calculated based upon estimated performance and the terms of the related business agreements. In addition, Mastercard may make payments to a customer directly related to entering into an agreement, which are generally capitalized and amortized over the life of the agreement on a straight-line basis. Contract assets include unbilled consideration typically resulting from executed consulting, data analytic and research services performed for customers in connection with Mastercard’s payment network service arrangements. Collection for these services typically occurs over the contractual term. Contract assets are included in prepaid expenses and other current assets and other assets on the consolidated balance sheet. The Company defers the recognition of revenue when consideration has been received prior to the satisfaction of performance obligations. As these performance obligations are satisfied, revenue is subsequently recognized. Deferred revenue is primarily derived from consulting, data analytic and research services. Deferred revenue is included in other current liabilities and other liabilities on the consolidated balance sheet. |
Business Combinations Policy | Business combinations - The Company accounts for business combinations under the acquisition method of accounting. The Company measures the tangible and intangible identifiable assets acquired, liabilities assumed and any non-controlling interest in the acquiree, at their fair values at the acquisition date. Acquisition-related costs are expensed as incurred and are included in general and administrative expenses. Any excess of purchase price over the fair value of net assets acquired, including identifiable intangible assets, is recorded as goodwill. |
Intangible Assets and Impairment of Assets Policy | Goodwill and other intangible assets - Indefinite-lived intangible assets consist of goodwill, which represents the synergies expected to arise after the acquisition date and the assembled workforce, and customer relationships. Finite-lived intangible assets consist of capitalized software costs, trademarks, tradenames, customer relationships and other intangible assets. Intangible assets with finite useful lives are amortized over their estimated useful lives, on a straight-line basis, which range from one to twenty years. Capitalized software includes internal and external costs incurred directly related to the design, development and testing phases of each capitalized software project. Impairment of assets - Goodwill and indefinite-lived intangible assets are not amortized but are tested annually for impairment in the fourth quarter, or sooner when circumstances indicate an impairment may exist. The impairment evaluation for goodwill utilizes a quantitative assessment. If the fair value of a reporting unit exceeds the carrying value, goodwill is not impaired. If the fair value of the reporting unit is less than its carrying value, then goodwill is impaired and the excess of the reporting unit’s carrying value over the fair value is recognized as an impairment charge. The impairment test for indefinite-lived intangible assets consists of a qualitative assessment to evaluate relevant events and circumstances that could affect the significant inputs used to determine the fair value of indefinite-lived intangible assets. If the qualitative assessment indicates that it is more likely than not that indefinite-lived intangible assets are impaired, then a quantitative assessment is required. Long-lived assets, other than goodwill and indefinite-lived intangible assets, are tested for impairment whenever events or circumstances indicate that their carrying amount may not be recoverable. If the carrying value of the asset cannot be recovered from estimated future cash flows, undiscounted and without interest, the fair value of the asset is calculated using the present value of estimated net future cash flows. If the carrying amount of the asset exceeds its fair value, an impairment is recorded. Impairment charges, if any, are recorded in general and administrative expenses on the consolidated statement of operations. |
Litigation Policy | Litigation - The Company is a party to certain legal and regulatory proceedings with respect to a variety of matters. The Company evaluates the likelihood of an unfavorable outcome of all legal or regulatory proceedings to which it is a party and accrues a loss contingency when the loss is probable and reasonably estimable. These judgments are subjective based on the status of the legal or regulatory proceedings, the merits of its defenses and consultation with in-house and external legal counsel. Legal costs are expensed as incurred and recorded in general and administrative expenses on the consolidated statement of operations. |
Settlement and Other Risk Management Policy | Settlement and other risk management - Mastercard’s rules guarantee the settlement of many of the transactions between its customers. Settlement exposure is the outstanding settlement risk to customers under Mastercard’s rules due to the difference in timing between the payment transaction date and subsequent settlement. While the term and amount of the guarantee are unlimited, the duration of settlement exposure is short term and typically limited to a few days. The Company also enters into agreements in the ordinary course of business under which the Company agrees to indemnify third parties against damages, losses and expenses incurred in connection with legal and other proceedings arising from relationships or transactions with the Company. As the extent of the Company’s obligations under these agreements depends entirely upon the occurrence of future events, the Company’s potential future liability under these agreements is not determinable. The Company accounts for each of its guarantees by recording the guarantee at its fair value at the inception or modification date through earnings. |
Income Taxes Policy | Income taxes - The Company follows an asset and liability based approach in accounting for income taxes as required under GAAP. Deferred income tax assets and liabilities are recorded to reflect the tax consequences on future years of temporary differences between the financial statement carrying amounts and income tax bases of assets and liabilities. Deferred income taxes are displayed separately as noncurrent assets and liabilities on the consolidated balance sheet. Valuation allowances are provided against assets which are not more likely than not to be realized. The Company recognizes all material tax positions, including uncertain tax positions in which it is more likely than not that the position will be sustained based on its technical merits and if challenged by the relevant taxing authorities. At each balance sheet date, unresolved uncertain tax positions are reassessed to determine whether subsequent developments require a change in the amount of recognized tax benefit. The allowance for uncertain tax positions is recorded in other current and noncurrent liabilities on the consolidated balance sheet. The Company records interest expense related to income tax matters as interest expense on the consolidated statement of operations. The Company includes penalties related to income tax matters in the income tax provision. The Company will recognize earnings of foreign affiliates that are determined to be global intangible low taxed income (“GILTI”) in the period it arises and it will not recognize deferred taxes for basis differences that may reverse as GILTI in future years. |
Cash and Cash Equivalents and Restricted Cash Policy | Cash and cash equivalents - Cash and cash equivalents include certain investments with daily liquidity and with a maturity of three months or less from the date of purchase. Cash equivalents are recorded at cost, which approximates fair value. Restricted cash - The Company classifies cash and cash equivalents as restricted when it is unavailable for withdrawal or use in its general operations. The Company has the following types of restricted cash and restricted cash equivalents: • Restricted cash for litigation settlement - The Company has restricted cash for litigation within a qualified settlement fund related to a preliminary settlement agreement for the U.S. merchant class litigation. The funds continue to be restricted for payments until the litigation matter is resolved. • Restricted security deposits held for customers - The Company requires collateral from certain customers for settlement of their transactions. The majority of collateral for settlement is in the form of standby letters of credit and bank guarantees which are not recorded on the consolidated balance sheet. Additionally, the Company holds cash deposits and certificates of deposit from certain customers as collateral for settlement of their transactions, which are recorded as assets on the consolidated balance sheet. These assets are fully offset by corresponding liabilities included on the consolidated balance sheet. These security deposits are typically held for the duration of the agreement with the customers. • Other restricted cash balances - The Company has other restricted cash balances which include contractually restricted deposits, as well as cash balances that are restricted based on the Company’s intention with regard to usage. These funds are classified on the consolidated balance sheet within prepaid expenses and other current assets and other assets. |
Fair Value Policy | Fair value - The Company measures certain financial assets and liabilities at fair value on a recurring basis by estimating the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. The Company classifies these recurring fair value measurements into a three-level hierarchy (“Valuation Hierarchy”). The Valuation Hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. A financial instrument’s categorization within the Valuation Hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of the Valuation Hierarchy are as follows: • Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. • Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in inactive markets and inputs that are observable for the asset or liability. • Level 3 - inputs to the valuation methodology are unobservable and cannot be directly corroborated by observable market data. Certain assets are measured at fair value on a nonrecurring basis. The Company’s non-financial assets measured at fair value on a nonrecurring basis include property, plant and equipment, goodwill and other intangible assets. These assets are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. The valuation methods for goodwill and other intangible assets acquired in business combinations involve assumptions concerning comparable company multiples, discount rates, growth projections and other assumptions of future business conditions. The Company uses various valuation techniques to determine fair value, primarily discounted cash flows analysis, relief-from-royalty, and multi-period excess earnings for estimating the fair value of its intangible assets. The Company uses market capitalization for estimating the fair value of its reporting unit. As the assumptions employed to measure these assets are based on management’s judgment using internal and external data, these fair value determinations are classified in Level 3 of the Valuation Hierarchy. |
Commitments and Contingencies, Policy | Contingent consideration - Certain business combinations involve the potential for future payment of consideration that is contingent upon the achievement of performance milestones. These liabilities are classified within Level 3 of the Valuation Hierarchy as the inputs used to measure fair value are unobservable and require management’s judgment. The fair value of the contingent consideration at the acquisition date and subsequent periods is determined utilizing an income approach based on a Monte Carlo technique and is recorded in other current liabilities and other liabilities on the consolidated balance sheet. Changes to projected performance milestones of the acquired businesses could result in a higher or lower contingent consideration liability. Measurement period adjustments, if any, to the preliminary estimated fair value of contingent consideration as of the acquisition date will be recorded to goodwill, however, changes in fair value as a result of updated assumptions will be recorded in general and administrative expenses on the consolidated statement of operations. |
Investment Securities Policy | Investment securities - The Company classifies investments in debt securities as available-for-sale. Available-for-sale securities that are available to meet the Company’s current operational needs are classified as current assets. Available-for-sale securities that are not available to meet the Company’s current operational needs are classified as non-current assets on the consolidated balance sheet. The investments in debt securities are carried at fair value, with unrealized gains and losses, net of applicable taxes, recorded as a separate component of accumulated other comprehensive income (loss) on the consolidated statement of comprehensive income. Net realized gains and losses on debt securities are recognized in investment income on the consolidated statement of operations. The specific identification method is used to determine realized gains and losses. The Company evaluates its debt securities for other-than-temporary impairment on an ongoing basis. When there has been a decline in fair value of a debt security below the amortized cost basis, the Company recognizes an other-than-temporary impairment if: (1) it has the intent to sell the security; (2) it is more likely than not that it will be required to sell the security before recovery of the amortized cost basis; or (3) it does not expect to recover the entire amortized cost basis of the security. The credit loss component of the impairment would be recognized in other income (expense), net on the consolidated statement of operations while the non-credit loss would remain in accumulated other comprehensive income (loss) until realized from a sale or an other-than-temporary impairment. The Company classifies time deposits with maturities greater than three months as held-to-maturity. Held-to-maturity securities that mature within one year are classified as current assets while held-to-maturity securities with maturities of greater than one year are classified as non-current assets. Time deposits are carried at amortized cost on the consolidated balance sheet and are intended to be held until maturity. |
Derivative Financial Instruments Policy | Derivative financial instruments - The Company’s derivative financial instruments are recorded as either assets or liabilities on the balance sheet and measured at fair value. The Company’s foreign exchange forward and option contracts are included in Level 2 of the Valuation Hierarchy as the fair value of these contracts are based on inputs, which are observable based on broker quotes for the same or similar instruments. As the Company does not elect hedge accounting for any derivative instruments, realized and unrealized gains and losses from the change in fair value of these contracts are recognized immediately in current-period earnings. The Company’s derivative contracts hedge foreign exchange risk and are not entered into for trading or speculative purposes. The Company did not have any derivative contracts accounted for under hedge accounting as of December 31, 2018 and 2017 . The Company has numerous investments in its foreign subsidiaries. The net assets of these subsidiaries are exposed to volatility in foreign currency exchange rates. The Company uses foreign currency denominated debt to hedge a portion of its net investment in foreign operations against adverse movements in exchange rates. The effective portion of the foreign currency gains and losses related to the foreign currency denominated debt are reported in accumulated other comprehensive income (loss) on the consolidated balance sheet as part of the cumulative translation adjustment component of equity. The ineffective portion, if any, is recognized in earnings in the current period. The Company evaluates the effectiveness of the net investment hedge each quarter. |
Settlement Due From/Due To Customers Policy | Settlement due from/due to customers - The Company operates systems for clearing and settling payment transactions among customers. Net settlements are generally cleared daily among customers through settlement cash accounts by wire transfer or other bank clearing means. However, some transactions may not settle until subsequent business days, resulting in amounts due from and due to customers. |
Property, Plant and Equipment Policy | Property, plant and equipment - Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets. Depreciation of leasehold improvements and amortization of capital leases is included in depreciation and amortization expense on the consolidated statement of operations. The useful lives of the Company’s assets are as follows: Asset Category Estimated Useful Life Buildings 30 years Building equipment 10 - 15 years Furniture and fixtures and equipment 3 - 5 years Leasehold improvements Shorter of life of improvement or lease term Capital leases Shorter of life of the asset or lease term |
Leases Policy | Leases - The Company enters into operating and capital leases for the use of premises and equipment. Rent expense related to lease agreements that contain lease incentives is recorded on a straight-line basis over the term of the lease. |
Pension and Other Postretirement Plans Policy | Pension and other postretirement plans - The Company recognizes the funded status of its single-employer defined benefit pension plans and postretirement plans as assets or liabilities on its consolidated balance sheet and recognizes changes in the funded status in the year in which the changes occur through accumulated other comprehensive income (loss). The funded status is measured as the difference between the fair value of plan assets and the projected benefit obligation at December 31, the measurement date. Overfunded plans, if any, are aggregated and recorded in other assets, while underfunded plans are aggregated and recorded as accrued expenses and other liabilities on the consolidated balance sheet. Net periodic pension and postretirement benefit cost/(income), excluding the service cost component, is recognized in other income (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 other comprehensive income (loss). The service cost component is recognized in general and administrative expenses on the consolidated statement of operations. Defined contribution plans - The Company’s contributions to defined contribution plans are recorded when employees render service to the Company. The charge is recorded in general and administrative expenses on the consolidated statement of operations. |
Advertising and Marketing Policy | Advertising and marketing - Expenses incurred to promote Mastercard’s products, services and brand are recognized in advertising and marketing on the consolidated statement of operations. The cost of media advertising is expensed when the advertising takes place. Advertising production costs are expensed as incurred. Promotional items are expensed at the time the promotional event occurs. Sponsorship costs are recognized over the period of benefit. |
Foreign Currency Remeasurement and Translation Policy | Foreign currency remeasurement and translation - Monetary assets and liabilities are remeasured to functional currencies using current exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are recorded at historical exchange rates. Revenue and expense accounts are remeasured at the weighted-average exchange rate for the period. Resulting exchange gains and losses related to remeasurement are included in general and administrative expenses on the consolidated statement of operations. Where a non-U.S. currency is the functional currency, translation from that functional currency to U.S. dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for revenue and expense accounts using a weighted-average exchange rate for the period. Resulting translation adjustments are reported as a component of accumulated other comprehensive income (loss). |
Treasury Stock Policy | Treasury stock - The Company records the repurchase of shares of its common stock at cost on the trade date of the transaction. These shares are considered treasury stock, which is a reduction to stockholders’ equity. Treasury stock is included in authorized and issued shares but excluded from outstanding shares. |
Share-based Payments Policy | Share-based payments - The Company measures share-based compensation expense at the grant date, based on the estimated fair value of the award and uses the straight-line method of attribution, net of estimated forfeitures, for expensing awards over the requisite employee service period. The Company estimates the fair value of its non-qualified stock option awards (“Options”) using a Black-Scholes valuation model. The fair value of restricted stock units (“RSUs”) is determined and fixed on the grant date based on the Company’s stock price, adjusted for the exclusion of dividend equivalents. The Monte Carlo simulation valuation model is used to determine the grant date fair value of performance stock units (“PSUs”) granted. All share-based compensation expenses are recorded in general and administrative expenses on the consolidated statement of operations. |
Redeemable Noncontrolling Interests Policy | Redeemable non-controlling interests - The Company’s business combinations may include provisions allowing non-controlling equity owners the ability to require the Company to purchase additional interests in the subsidiary at their discretion. These interests are initially recorded at fair value and in subsequent reporting periods are accreted or adjusted to their estimated redemption value. These adjustments to the redemption value will impact retained earnings or additional paid-in capital on the consolidated balance sheet, but will not impact the consolidated statement of operations. The redeemable non-controlling interests are considered temporary and reported outside of permanent equity on the consolidated balance sheet at the greater of the carrying amount adjusted for the non-controlling interest’s share of net income (loss) or its redemption value. |
Earnings Per Share Policy | Earnings per share - The Company calculates basic earnings per share (“EPS”) by dividing net income by the weighted-average number of common shares outstanding during the year. Diluted EPS is calculated by dividing net income by the weighted-average number of common shares outstanding during the year, adjusted for the potentially dilutive effect of stock options and unvested stock units using the treasury stock method. The Company may be required to calculate EPS using the two-class method as a result of its redeemable non-controlling interests. If redemption value exceeds the fair value of the redeemable non-controlling interests, the excess would be a reduction to net income for the EPS calculation. For 2018 , 2017 and 2016 , there was no impact to EPS for adjustments related to redeemable non-controlling interests. |
Recent Accounting Pronouncements Policy | Recently adopted accounting pronouncements Disclosure requirements for defined benefit plans - In August 2018, the Financial Accounting Standards Board (the “FASB”) issued accounting guidance which modifies disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans by removing, modifying and adding certain disclosures. This guidance is required to be applied retrospectively and is effective for periods ending after December 15, 2020, with early adoption permitted. The Company adopted this guidance effective December 31, 2018, which did not result in a material impact on the Company’s current year consolidated financial statements. Income taxes - In March 2018, the FASB incorporated the Securities and Exchange Commission’s (the “SEC’s”) interpretive guidance from Staff Accounting Bulletin No. 118 (“SAB 118”), issued on December 22, 2017, into the income tax accounting codification under GAAP. The guidance allows for the recognition of provisional amounts related to 2017 U.S. tax reform (“U.S. Tax Reform”) during a one year measurement period with changes recorded as a component of income tax expense. This guidance was effective upon issuance. Refer to Note 19 (Income Taxes) for further discussion. Net periodic pension cost and net periodic postretirement benefit cost - In March 2017, the FASB issued accounting guidance to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost. Under this guidance, the service cost component is required to be reported in the same line item as other compensation costs arising from services rendered by employees during the period. The other components of the net periodic benefit costs are required to be presented on the consolidated statement of operations separately from the service cost component and outside of operating income. This guidance is required to be applied retrospectively and is effective for periods beginning after December 15, 2017. The Company adopted this guidance effective January 1, 2018, which did not result in a material impact on the Company’s current year consolidated financial statements. The Company did not apply this guidance retrospectively, as the impact was de minimis to the prior year consolidated financial statements. Refer to Note 13 (Pension, Postretirement and Savings Plans) for the components of the Company’s net periodic pension cost and net periodic postretirement benefit costs. Restricted cash - In November 2016, the FASB issued accounting guidance to address diversity in the classification and presentation of changes in restricted cash on the consolidated statement of cash flows. Under this guidance, companies are required to present restricted cash and restricted cash equivalents with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown on the consolidated statement of cash flows. This guidance is required to be applied retrospectively and is effective for periods beginning after December 15, 2017, with early adoption permitted. The Company adopted this guidance effective January 1, 2018. In accordance with the adoption of this standard, the Company includes restricted cash, which currently consists of restricted cash for litigation settlement, restricted security deposits held for customers and other restricted cash balances in its reconciliation of beginning-of-period and end-of-period amounts shown on the consolidated statement of cash flows. Refer to Note 5 (Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents) for related disclosures. Intra-entity asset transfers - In October 2016, the FASB issued accounting guidance to simplify the accounting for income tax consequences of intra-entity transfers of assets other than inventory. Under this guidance, companies are required to recognize the income tax consequences of an intra-entity asset transfer when the transfer occurs. This guidance must be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the period of adoption. The guidance is effective for periods beginning after December 15, 2017. The Company adopted this guidance effective January 1, 2018. Refer to Note 19 (Income Taxes) for further discussion. See the section in this note entitled Cumulative Effect of the Adopted Accounting Pronouncements for a summary of the cumulative impact of adopting this standard as of January 1, 2018. Financial instruments - In January 2016, the FASB issued accounting guidance to amend certain aspects of recognition, measurement, presentation and disclosure of financial instruments, including the requirement to measure certain equity investments at fair value with changes in fair value recognized in income. This guidance is required to be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. Amendments related to equity securities without readily determinable fair values should be applied prospectively to equity investments that exist as of the date of adoption. The guidance is effective for periods beginning after December 15, 2017. The Company adopted this guidance effective January 1, 2018. The cumulative effect of the adoption of the standard was de minimis to the Company’s balance sheet upon adoption. For the year ended December 31, 2018, the Company recorded a gain on non-marketable equity investments, which resulted in a pre-tax increase of $12 million . Revenue recognition - In May 2014, the FASB issued accounting guidance that provides a single, comprehensive revenue recognition model for all contracts with customers and supersedes most of the existing revenue recognition requirements. Under this guidance, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted this guidance effective January 1, 2018 under the modified retrospective transition method, applying the standard to contracts not completed as of January 1, 2018 and considered the aggregate amount of modifications. See the section in this note entitled Cumulative Effect of the Adopted Accounting Pronouncements for a summary of the cumulative impact of adopting this standard as of January 1, 2018. This new revenue guidance impacts the timing of certain customer incentives recognized in the Company’s consolidated statement of operations, as they are recognized over the life of the contract. Previously, such incentives were recognized when earned by the customer. The new revenue guidance also impacts the Company’s accounting recognition for certain market development fund contributions and expenditures. Historically, these items were recorded on a net basis in net revenue and will now be recognized on a gross basis, resulting in an increase to both revenues and expenses. The following tables summarize the impact of the revenue standard on the Company’s consolidated statement of operations for the year ended December 31, 2018 and consolidated balance sheet as of December 31, 2018 : Year Ended December 31, 2018 Balances excluding revenue standard Impact of revenue standard As reported (in millions) Net Revenue $ 14,471 $ 479 $ 14,950 Operating Expenses Advertising and marketing 743 164 907 Income before income taxes 6,889 315 7,204 Income tax expense 1,278 67 1,345 Net Income 5,611 248 5,859 December 31, 2018 Balances excluding revenue standard Impact of revenue standard As reported (in millions) Assets Accounts receivable $ 2,214 $ 62 $ 2,276 Prepaid expenses and other current assets 1,176 256 1,432 Deferred income taxes 666 (96 ) 570 Other assets 2,388 915 3,303 Liabilities Accounts payable 959 (422 ) 537 Accrued expenses 4,375 372 4,747 Other current liabilities 1,085 (136 ) 949 Other liabilities 1,145 732 1,877 Equity Retained earnings 26,692 591 27,283 For a more detailed discussion on revenue recognition, refer to Note 3 (Revenue) . Cumulative Effect of the Adopted Accounting Pronouncements The following table summarizes the cumulative impact of the changes made to the January 1, 2018 consolidated balance sheet for the adoption of the new accounting standards pertaining to revenue recognition and intra-entity asset transfers. The prior periods have not been restated and have been reported under the accounting standards in effect for those periods. Balance at December 31, 2017 Impact of revenue standard Impact of intra-entity asset transfers standard Balance at (in millions) Assets Accounts receivable $ 1,969 $ 44 $ — $ 2,013 Prepaid expenses and other current assets 1,040 181 (17 ) 1,204 Deferred income taxes 250 (69 ) 186 367 Other assets 2,298 690 (352 ) 2,636 Liabilities Accounts payable 933 (495 ) — 438 Accrued expenses 3,931 391 — 4,322 Other current liabilities 792 (44 ) — 748 Other liabilities 1,438 628 — 2,066 Equity Retained earnings 22,364 366 (183 ) 22,547 Recent accounting pronouncements not yet adopted Implementation costs incurred in a hosting arrangement that is a service contract - In August 2018, the FASB issued accounting guidance which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This guidance is effective for periods beginning after December 15, 2019 and early adoption is permitted. Companies are required to adopt this guidance either retrospectively or by prospectively applying the guidance to all implementation costs incurred after the date of adoption. The Company is in the process of evaluating when it will adopt this guidance and the potential effects this guidance will have on its consolidated financial statements. Disclosure requirements for fair value measurement - In August 2018, the FASB issued accounting guidance which modifies disclosure requirements for fair value measurements by removing, modifying and adding certain disclosures. This guidance is effective for periods beginning after December 15, 2019. Companies are permitted to early adopt the removed or modified disclosures and delay adoption of added disclosures until the effective date. Companies are required to adopt the guidance for certain added disclosures prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption and all other amendments retrospectively to all periods presented upon their effective date. The Company is in the process of evaluating when it will adopt this guidance and the potential effects this guidance will have on its disclosures. Comprehensive income - In February 2018, the FASB issued accounting guidance that allows for a one-time reclassification from accumulated other comprehensive income (loss) to retained earnings for stranded tax effects resulting from U.S. Tax Reform. The guidance is effective for periods beginning after December 15, 2018, with early adoption permitted. The Company will adopt this guidance effective January 1, 2019 and does not expect the impacts of this standard to be material. Derivatives and hedging - In August 2017, the FASB issued accounting guidance to improve and simplify existing guidance to allow companies to better reflect their risk management activities in the financial statements. The guidance expands the ability to hedge nonfinancial and financial risk components, eliminates the requirement to separately measure and recognize hedge ineffectiveness and eases requirements of an entity’s assessment of hedge effectiveness. This guidance is effective for periods beginning after December 15, 2018 and early adoption is permitted. The Company currently does not account for its foreign currency derivative contracts under hedge accounting. The Company will adopt this guidance effective January 1, 2019 and does not expect the impacts of this standard to be material. For a more detailed discussion of the Company’s foreign exchange risk management activities, refer to Note 22 (Foreign Exchange Risk Management) . Credit losses - In June 2016, the FASB issued accounting guidance to amend the measurement of credit losses for financial instruments. The guidance requires all expected credit losses for most financial assets held at the reporting date to be measured based on historical experience, current conditions, and reasonable and supportable forecasts, generally resulting in the earlier recognition of allowance for losses. The guidance is effective for periods beginning after December 15, 2019, with early adoption permitted. The Company is required to apply the provisions of this guidance as a cumulative effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. The Company will adopt this guidance effective January 1, 2020 and does not expect the impacts of this standard to be material. Leases - In February 2016, the FASB issued accounting guidance that will change how companies account for and present lease arrangements. This guidance requires companies to recognize leased assets and liabilities for both financing and operating leases. This guidance is effective for periods beginning after December 15, 2018. The Company will adopt this guidance effective January 1, 2019 using the modified retrospective approach as of the date of adoption with the available practical expedients. Upon adoption of the standard, the estimated impact on the Company’s consolidated financial statements is expected to be an increase in non-current assets with a corresponding increase in current and non-current liabilities. The Company estimates that the increase in assets and liabilities will represent approximately 2% of the Company’s total assets and total liabilities as of December 31, 2018 and expects no significant impact to retained earnings. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Financial statement Effects of New Accounting Pronouncements | The following tables summarize the impact of the revenue standard on the Company’s consolidated statement of operations for the year ended December 31, 2018 and consolidated balance sheet as of December 31, 2018 : Year Ended December 31, 2018 Balances excluding revenue standard Impact of revenue standard As reported (in millions) Net Revenue $ 14,471 $ 479 $ 14,950 Operating Expenses Advertising and marketing 743 164 907 Income before income taxes 6,889 315 7,204 Income tax expense 1,278 67 1,345 Net Income 5,611 248 5,859 December 31, 2018 Balances excluding revenue standard Impact of revenue standard As reported (in millions) Assets Accounts receivable $ 2,214 $ 62 $ 2,276 Prepaid expenses and other current assets 1,176 256 1,432 Deferred income taxes 666 (96 ) 570 Other assets 2,388 915 3,303 Liabilities Accounts payable 959 (422 ) 537 Accrued expenses 4,375 372 4,747 Other current liabilities 1,085 (136 ) 949 Other liabilities 1,145 732 1,877 Equity Retained earnings 26,692 591 27,283 For a more detailed discussion on revenue recognition, refer to Note 3 (Revenue) . Cumulative Effect of the Adopted Accounting Pronouncements The following table summarizes the cumulative impact of the changes made to the January 1, 2018 consolidated balance sheet for the adoption of the new accounting standards pertaining to revenue recognition and intra-entity asset transfers. The prior periods have not been restated and have been reported under the accounting standards in effect for those periods. Balance at December 31, 2017 Impact of revenue standard Impact of intra-entity asset transfers standard Balance at (in millions) Assets Accounts receivable $ 1,969 $ 44 $ — $ 2,013 Prepaid expenses and other current assets 1,040 181 (17 ) 1,204 Deferred income taxes 250 (69 ) 186 367 Other assets 2,298 690 (352 ) 2,636 Liabilities Accounts payable 933 (495 ) — 438 Accrued expenses 3,931 391 — 4,322 Other current liabilities 792 (44 ) — 748 Other liabilities 1,438 628 — 2,066 Equity Retained earnings 22,364 366 (183 ) 22,547 |
Property, Plant and Equipment | The useful lives of the Company’s assets are as follows: Asset Category Estimated Useful Life Buildings 30 years Building equipment 10 - 15 years Furniture and fixtures and equipment 3 - 5 years Leasehold improvements Shorter of life of improvement or lease term Capital leases Shorter of life of the asset or lease term Property, plant and equipment consisted of the following at December 31 : 2018 2017 (in millions) Building, building equipment and land $ 481 $ 455 Equipment 987 841 Furniture and fixtures 85 81 Leasehold improvements 215 166 Property, plant and equipment 1,768 1,543 Less: accumulated depreciation and amortization (847 ) (714 ) Property, plant and equipment, net $ 921 $ 829 |
Acquisitions Business Combina_2
Acquisitions Business Combination (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | The Company has finalized the purchase accounting for businesses acquired during 2017. The final fair values of the purchase price allocations, as of the acquisition dates, are noted below: (in millions) Cash consideration $ 1,286 Contingent consideration 202 Redeemable non-controlling interests 69 Gain on previously held minority interest 14 Total fair value of businesses acquired $ 1,571 Assets: Cash and cash equivalents $ 111 Other current assets 110 Other intangible assets 488 Goodwill 1,135 Other assets 91 Total assets 1,935 Liabilities: Short-term debt 1 64 Other current liabilities 170 Net pension liability 66 Other liabilities 64 Total liabilities 364 Net assets acquired $ 1,571 1 The short-term debt assumed through acquisitions was repaid during 2017. |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | The following table summarizes the identified intangible assets acquired: Acquisition Date Fair Value Weighted-Average Useful Life (in millions) (Years) Developed technologies $ 319 7.5 Customer relationships 166 9.9 Other 3 1.4 Other intangible assets $ 488 8.3 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table disaggregates the Company’s net revenue by source and geographic region for the year ended December 31, 2018 : (in millions) Revenue by source: Domestic assessments $ 6,138 Cross-border volume fees 4,954 Transaction processing 7,391 Other revenues 3,348 Gross revenue 21,831 Rebates and incentives (contra-revenue) (6,881 ) Net revenue $ 14,950 Net revenue by geographic region: North American Markets $ 5,311 International Markets 9,441 Other 1 198 Net revenue $ 14,950 1 Includes revenues managed by corporate functions. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Share | The components of basic and diluted EPS for common shares for each of the years ended December 31 were as follows: 2018 2017 2016 (in millions, except per share data) Numerator Net income $ 5,859 $ 3,915 $ 4,059 Denominator Basic weighted-average shares outstanding 1,041 1,067 1,098 Dilutive stock options and stock units 6 5 3 Diluted weighted-average shares outstanding 1 1,047 1,072 1,101 Earnings per Share Basic $ 5.63 $ 3.67 $ 3.70 Diluted $ 5.60 $ 3.65 $ 3.69 Note: Table may not sum due to rounding. 1 For the years presented, the calculation of diluted EPS excluded a minimal amount of anti-dilutive share-based payment awards. |
Cash, Cash Equivalents, Restr_2
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | |
Schedule of Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents reported on the consolidated balance sheet that total to the amounts shown on the consolidated statement of cash flows. December 31, 2018 2017 2016 2015 (in millions) Cash and cash equivalents $ 6,682 $ 5,933 $ 6,721 $ 5,747 Restricted cash and restricted cash equivalents Restricted cash for litigation settlement 553 546 543 541 Restricted security deposits held for customers 1,080 1,085 991 895 Prepaid expenses and other current assets 22 28 3 — Other assets — — 15 10 Cash, cash equivalents, restricted cash and restricted cash equivalents $ 8,337 $ 7,592 $ 8,273 $ 7,193 |
Supplemental Cash Flows (Tables
Supplemental Cash Flows (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of Supplemental Cash Flow Disclosures | The following table includes supplemental cash flow disclosures for each of the years ended December 31: 2018 2017 2016 (in millions) Cash paid for income taxes, net of refunds $ 1,790 $ 1,893 $ 1,579 Cash paid for interest 153 135 74 Cash paid for legal settlements 260 47 101 Non-cash investing and financing activities Dividends declared but not yet paid 340 263 238 Capital leases and other 10 30 3 Fair value of assets acquired, net of cash acquired — 1,825 — Fair value of liabilities assumed related to acquisitions — 365 — |
Fair Value and Investment Sec_2
Fair Value and Investment Securities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Financial Instruments, Financial Liabilities, Balance Sheet Groupings [Abstract] | |
Distribution of Financial Instruments, Measured at Fair Value on a Recurring Basis | The distribution of the Company’s financial instruments measured at fair value on a recurring basis within the Valuation Hierarchy were as follows: December 31, 2018 December 31, 2017 Quoted Prices Significant Significant Total Quoted Prices Significant Significant Total (in millions) Assets Investment securities available for sale 1 : Municipal securities $ — $ 15 $ — $ 15 $ — $ 17 $ — $ 17 Government and agency securities 65 92 — 157 81 104 — 185 Corporate securities — 1,043 — 1,043 — 876 — 876 Asset-backed securities — 217 — 217 — 70 — 70 Equity securities — — — — 1 — — 1 Derivative instruments 2 : Foreign currency derivative assets — 35 — 35 — 6 — 6 Deferred compensation plan 3 : Deferred compensation assets 54 — — 54 55 — — 55 Liabilities Derivative instruments 2 : Foreign currency derivative liabilities $ — $ (6 ) $ — $ (6 ) $ — $ (30 ) $ — $ (30 ) Deferred compensation plan 4 : Deferred compensation liabilities (54 ) — — (54 ) (54 ) — — (54 ) 1 The Company’s U.S. government securities and marketable equity securities are classified within Level 1 of the Valuation Hierarchy as the fair values are based on unadjusted quoted prices for identical assets in active markets. The fair value of the Company’s available-for-sale municipal securities, government and agency securities, corporate securities and asset-backed securities are based on observable inputs such as quoted prices, benchmark yields and issuer spreads for similar assets in active markets and are therefore included in Level 2 of the Valuation Hierarchy. 2 The Company’s foreign currency derivative asset and liability contracts have been classified within Level 2 of the Valuation Hierarchy as the fair value is based on observable inputs such as broker quotes relating to foreign currency exchange rates for similar derivative instruments. See Note 22 (Foreign Exchange Risk Management) for further details. 3 The Company has a nonqualified deferred compensation plan where assets are invested primarily in mutual funds held in a rabbi trust, which is restricted for payments to participants of the plan. The Company has elected to use the fair value option for these mutual funds, which are measured using quoted prices of identical instruments in active markets and are included in prepaid expenses and other current assets on the consolidated balance sheet. 4 The deferred compensation liabilities are measured at fair value based on the quoted prices of identical instruments to the investment vehicles selected by the participants. These are included in other liabilities on the consolidated balance sheet |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | The activity of the Company’s contingent consideration liability for 2018 was as follows: (in millions) Balance at December 31, 2017 $ 219 Net change in valuation 19 Payments (5 ) Foreign currency translation (14 ) Balance at December 31, 2018 $ 219 |
Available-for-Sale Investment Securities, Unrealized Gains and Losses | The major classes of the Company’s available-for-sale investment securities, for which unrealized gains and losses are recorded as a separate component of other comprehensive income (loss) on the consolidated statement of comprehensive income, and their respective amortized cost basis and fair values as of December 31, 2018 and 2017 were as follows: December 31, 2018 December 31, 2017 Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value (in millions) Municipal securities $ 15 $ — $ — $ 15 $ 17 $ — $ — $ 17 Government and agency securities 157 — — 157 185 — — 185 Corporate securities 1,044 1 (2 ) 1,043 875 2 (1 ) 876 Asset-backed securities 217 — — 217 70 — — 70 Equity securities — — — — — 1 — 1 Total $ 1,433 $ 1 $ (2 ) $ 1,432 $ 1,147 $ 3 $ (1 ) $ 1,149 |
Maturity Distribution Based on Contractual Terms of Investment Securities | The maturity distribution based on the contractual terms of the Company’s investment securities at December 31, 2018 was as follows: Available-For-Sale Amortized Cost Fair Value (in millions) Due within 1 year $ 376 $ 376 Due after 1 year through 5 years 1,056 1,055 Due after 5 years through 10 years 1 1 Total $ 1,433 $ 1,432 |
Prepaid Expenses and Other As_2
Prepaid Expenses and Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Prepaid Expense and Other Assets [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following at December 31 : 2018 2017 (in millions) Customer and merchant incentives $ 778 $ 464 Prepaid income taxes 51 77 Other 603 499 Total prepaid expenses and other current assets $ 1,432 $ 1,040 |
Schedule of Other Assets, Noncurrent | Other assets consisted of the following at December 31 : 2018 2017 (in millions) Customer and merchant incentives $ 2,458 $ 1,434 Nonmarketable equity investments 337 249 Prepaid income taxes — 352 Income taxes receivable 298 178 Other 210 85 Total other assets $ 3,303 $ 2,298 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | The useful lives of the Company’s assets are as follows: Asset Category Estimated Useful Life Buildings 30 years Building equipment 10 - 15 years Furniture and fixtures and equipment 3 - 5 years Leasehold improvements Shorter of life of improvement or lease term Capital leases Shorter of life of the asset or lease term Property, plant and equipment consisted of the following at December 31 : 2018 2017 (in millions) Building, building equipment and land $ 481 $ 455 Equipment 987 841 Furniture and fixtures 85 81 Leasehold improvements 215 166 Property, plant and equipment 1,768 1,543 Less: accumulated depreciation and amortization (847 ) (714 ) Property, plant and equipment, net $ 921 $ 829 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Change in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the years ended December 31, 2018 and 2017 were as follows: 2018 2017 (in millions) Beginning balance $ 3,035 $ 1,756 Additions 2 1,136 Foreign currency translation (133 ) 143 Ending balance $ 2,904 $ 3,035 |
Other Intangible Assets (Tables
Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of Intangible Assets | The following table sets forth net intangible assets, other than goodwill, at December 31 : 2018 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (in millions) Finite-lived intangible assets Capitalized software $ 1,514 $ (898 ) $ 616 $ 1,572 $ (888 ) $ 684 Customer relationships 439 (232 ) 207 473 (214 ) 259 Other 46 (45 ) 1 57 (55 ) 2 Total 1,999 (1,175 ) 824 2,102 (1,157 ) 945 Indefinite-lived intangible assets Customer relationships 167 — 167 175 — 175 Total $ 2,166 $ (1,175 ) $ 991 $ 2,277 $ (1,157 ) $ 1,120 |
Schedule of Estimated Future Amortization Expense | The following table sets forth the estimated future amortization expense on finite-lived intangible assets on the consolidated balance sheet at December 31, 2018 for the years ending December 31 : (in millions) 2019 $ 248 2020 187 2021 127 2022 51 2023 and thereafter 211 $ 824 |
Accrued Expenses and Accrued _2
Accrued Expenses and Accrued Litigation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Liabilities [Abstract] | |
Accrued Expenses | Accrued expenses consisted of the following at December 31 : 2018 2017 (in millions) Customer and merchant incentives $ 3,275 $ 2,648 Personnel costs 744 613 Advertising 103 88 Income and other taxes 158 194 Other 467 388 Total accrued expenses $ 4,747 $ 3,931 |
Pension, Postretirement and S_2
Pension, Postretirement and Savings Plans Pension, Postretirement and Savings Plans (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Schedule of Changes in Projected Benefit Obligations [Table Text Block] | The following table sets forth the Plans’ funded status, key assumptions and amounts recognized in the Company’s consolidated balance sheet at December 31 : Pension Plans Postretirement Plan 2018 2017 2018 2017 ($ in millions) Change in benefit obligation Benefit obligation at beginning of year $ 468 $ 46 $ 61 $ 59 Benefit obligation acquired during the year — 410 — — Service cost 9 9 1 1 Interest cost 12 8 2 2 Actuarial (gain) loss (7 ) (44 ) (2 ) 3 Benefits paid (22 ) (12 ) (5 ) (4 ) Transfers in 1 3 — — Foreign currency translation (23 ) 48 — — Benefit obligation at end of year 438 468 57 61 Change in plan assets Fair value of plan assets at beginning of year 427 33 — — Fair value of plan assets acquired during the year — 344 — — Actual (loss) gain on plan assets (8 ) (4 ) — — Employer contributions 33 23 5 4 Benefits paid (23 ) (12 ) (5 ) (4 ) Transfers in 2 3 — — Foreign currency translation (21 ) 40 — — Fair value of plan assets at end of year 410 427 — — Funded status at end of year $ (28 ) $ (41 ) $ (57 ) $ (61 ) Amounts recognized on the consolidated balance sheet consist of: Other liabilities, short-term $ — $ — $ (3 ) $ (3 ) Other liabilities, long-term (28 ) (41 ) (54 ) (58 ) $ (28 ) $ (41 ) $ (57 ) $ (61 ) Accumulated other comprehensive income consists of: Net actuarial (gain) loss $ (5 ) $ (22 ) $ (7 ) $ (5 ) Prior service credit 1 — (6 ) (8 ) Balance at end of year $ (4 ) $ (22 ) $ (13 ) $ (13 ) Weighted-average assumptions used to determine end of year benefit obligations Discount rate Non-U.S. Plans 1.80 % 1.80 % * * Vocalink Plan 3.10 % 2.80 % * * Postretirement Plan * * 4.25 % 3.50 % Rate of compensation increase Non-U.S. Plans 2.60 % 2.60 % * * Vocalink Plan 4.00 % 3.85 % * * Postretirement Plan * * 3.00 % 3.00 % * Not applicable |
Schedule of Benefit Obligations in Excess of Fair Value of Plan Assets [Table Text Block] | Each of the Pension Plans had benefit obligations in excess of plan assets at December 31, 2018 and 2017 . Information on the Pension Plans were as follows: 2018 2017 (in millions) Projected benefit obligation $ 438 $ 468 Accumulated benefit obligation 430 428 Fair value of plan assets 410 427 |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | Components of net periodic benefit cost recorded in earnings were as follows for the Plans for each of the years ended December 31 : Pension Plans Postretirement Plan 2018 2017 2016 2018 2017 2016 (in millions) Service cost $ 9 $ 9 $ 10 $ 1 $ 1 $ 1 Interest cost 12 8 1 2 2 2 Expected return on plan assets (20 ) (13 ) (1 ) — — — Curtailment gain — — — — — — Amortization of actuarial loss — — — — — — Amortization of prior service credit — — — (2 ) (2 ) (1 ) Pension settlement charge — — — — — — Net periodic benefit cost $ 1 $ 4 $ 10 $ 1 $ 1 $ 2 |
Schedule of Defined Benefit Plan Amounts Recognized in Other Comprehensive Income (Loss) [Table Text Block] | Other changes in plan assets and benefit obligations recognized in other comprehensive income for the years ended December 31 were as follows: Pension Plans Postretirement Plan 2018 2017 2016 2018 2017 2016 (in millions) Curtailment gain $ — $ — $ — $ — $ — $ — Current year actuarial loss (gain) 17 (22 ) 1 (2 ) 5 — Current year prior service credit 1 — — — — — Amortization of prior service credit — — — 2 2 1 Pension settlement charge — — — — — — Total other comprehensive loss (income) $ 18 $ (22 ) $ 1 $ — $ 7 $ 1 Total net periodic benefit cost and other comprehensive loss (income) $ 19 $ (18 ) $ 11 $ 1 $ 8 $ 3 |
Schedule of Assumptions Used [Table Text Block] | Weighted-average assumptions used to determine net periodic benefit cost were as follows for the years ended December 31 : Pension Plans Postretirement Plan 2018 2017 2016 2018 2017 2016 Discount rate Non-U.S. Plans 1.80 % 1.60 % 1.85 % * * * Vocalink Plan 2.80 % 2.50 % * * * * Postretirement Plan * * * 3.50 % 4.00 % 4.25 % Expected return on plan assets Non-U.S. Plans 3.00 % 3.25 % 3.25 % * * * Vocalink Plan 4.75 % 4.75 % * * * * Rate of compensation increase Non-U.S. Plans 2.60 % 2.59 % 2.64 % * * * Vocalink Plan 3.85 % 3.95 % * * * * Postretirement Plan * * * 3.00 % 3.00 % 3.00 % * Not applicable |
Schedule of Health Care Cost Trend Rates [Table Text Block] | The following additional assumptions were used at December 31 in accounting for the Postretirement Plan: 2018 2017 Health care cost trend rate assumed for next year 6.00 % 6.50 % Ultimate trend rate 5.00 % 5.00 % Year that the rate reaches the ultimate trend rate 2 3 |
Schedule of Allocation of Plan Assets [Table Text Block] | The following tables set forth by level, within the Valuation Hierarchy, the Pension Plans’ assets at fair value as of December 31, 2018 and 2017 : December 31, 2018 December 31, 2017 Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Fair Value Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Fair Value (in millions) Cash and cash equivalents $ 22 $ — $ — $ 22 $ 21 $ — $ — $ 21 Government and agency securities — 88 — 88 21 95 — 116 Mutual funds 154 30 — 184 146 28 — 174 Insurance contracts — 57 — 57 — 45 — 45 Asset-backed securities — — 34 34 — — 31 31 Other — 25 — 25 2 16 22 40 Total $ 176 $ 200 $ 34 $ 410 $ 190 $ 184 $ 53 $ 427 |
Schedule of Expected Benefit Payments [Table Text Block] | Actual benefit payments may differ from expected benefit payments. Pension Plans Postretirement Plan (in millions) 2019 $ 14 $ 3 2020 10 4 2021 11 4 2022 14 4 2023 13 4 2024 - 2028 64 20 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Instruments [Abstract] | |
Schedule of Debt | Long-term debt consisted of the following at December 31: Notes Issuance Date Interest Payment Terms Maturity Date Aggregate Principal Amount Stated Interest Rate Effective Interest Rate 2018 2017 (in millions, except percentages) 2018 USD Notes February 2018 Semi-annually 2028 $ 500 3.500 % 3.598 % $ 500 $ — 2048 $ 500 3.950 % 3.990 % 500 — $ 1,000 2016 USD Notes November 2016 Semi-annually 2021 $ 650 2.000 % 2.236 % 650 650 2026 750 2.950 % 3.044 % 750 750 2046 600 3.800 % 3.893 % 600 600 $ 2,000 2015 Euro Notes December 2015 Annually 2022 € 700 1.100 % 1.265 % 801 839 2027 800 2.100 % 2.189 % 916 958 2030 150 2.500 % 2.562 % 172 180 € 1,650 2014 USD Notes March 2014 Semi-annually 2019 $ 500 2.000 % 2.178 % 500 500 2024 1,000 3.375 % 3.484 % 1,000 1,000 $ 1,500 6,389 5,477 Less: Unamortized discount and debt issuance costs (55 ) (53 ) Total debt outstanding 6,334 5,424 Less: Current portion 1 (500 ) — Long-term debt $ 5,834 $ 5,424 1 Relates to the current portion of the 2014 USD Notes, due in April 2019, classified as current portion of long-term debt on the consolidated balance sheet. |
Schedule of Maturities of Long-term Debt [Table Text Block] | Scheduled annual maturities of the principal portion of long-term debt outstanding at December 31, 2018 are summarized below. (in millions) 2019 $ 500 2020 — 2021 650 2022 801 2023 — Thereafter 4,438 Total $ 6,389 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Classes of Capital Stock | Mastercard’s amended and restated certificate of incorporation authorizes the following classes of capital stock: Class Par Value Per Share Authorized Shares (in millions) Dividend and Voting Rights A $0.0001 3,000 One vote per share B $0.0001 1,200 Non-voting Preferred $0.0001 300 No shares issued or outstanding at December 31, 2018 and 2017, respectively. Dividend and voting rights are to be determined by the Board of Directors of the Company upon issuance. |
Schedule of Ownership and Governance Structure | Equity ownership and voting power of the Company’s shares were allocated as follows as of December 31 : 2018 2017 Equity Ownership General Voting Power Equity Ownership General Voting Power Public Investors (Class A stockholders) 88.0 % 89.0 % 88.0 % 89.2 % Principal or Affiliate Customers (Class B stockholders) 1.1 % — % 1.4 % — % Mastercard Foundation (Class A stockholders) 10.9 % 11.0 % 10.6 % 10.8 % |
Schedule of Share Repurchases and Authorizations | The following table summarizes the Company’s share repurchase authorizations of its Class A common stock through December 31, 2018 , as well as historical purchases: Board authorization dates December December December December 2015 December 2014 Date program became effective January 2019 March 2018 April 2017 February 2016 January 2015 Total (in millions, except average price data) Board authorization $ 6,500 $ 4,000 $ 4,000 $ 4,000 $ 3,750 $ 22,250 Dollar-value of shares repurchased in 2016 $ — $ — $ — $ 3,004 $ 507 $ 3,511 Remaining authorization at December 31, 2016 $ — $ — $ 4,000 $ 996 $ — $ 4,996 Dollar-value of shares repurchased in 2017 $ — $ — $ 2,766 $ 996 $ — $ 3,762 Remaining authorization at December 31, 2017 $ — $ 4,000 $ 1,234 $ — $ — $ 5,234 Dollar-value of shares repurchased in 2018 $ — $ 3,699 $ 1,234 $ — $ — $ 4,933 Remaining authorization at December 31, 2018 $ 6,500 $ 301 $ — $ — $ — $ 6,801 Shares repurchased in 2016 — — — 31.2 5.7 36.9 Average price paid per share in 2016 $ — $ — $ — $ 96.15 $ 89.76 $ 95.18 Shares repurchased in 2017 — — 21.0 9.1 — 30.1 Average price paid per share in 2017 $ — $ — $ 131.97 $ 109.16 $ — $ 125.05 Shares repurchased in 2018 — 19.0 7.2 — — 26.2 Average price paid per share in 2018 $ — $ 194.77 $ 171.11 $ — $ — $ 188.26 Cumulative shares repurchased through December 31, 2018 — 19.0 28.2 40.4 40.8 128.4 Cumulative average price paid per share $ — $ 194.77 $ 141.99 $ 99.10 $ 92.03 $ 120.44 |
Schedule of Changes in Common Stock Outstanding [Table Text Block] | The following table presents the changes in the Company’s outstanding Class A and Class B common stock for the years ended December 31 : Outstanding Shares Class A Class B (in millions) Balance at December 31, 2015 1,095.0 21.3 Purchases of treasury stock (36.9 ) — Share-based payments 2.3 — Conversion of Class B to Class A common stock 2.0 (2.0 ) Balance at December 31, 2016 1,062.4 19.3 Purchases of treasury stock (30.1 ) — Share-based payments 2.2 — Conversion of Class B to Class A common stock 5.2 (5.2 ) Balance at December 31, 2017 1,039.7 14.1 Purchases of treasury stock (26.2 ) — Share-based payments 2.8 — Conversion of Class B to Class A common stock 2.3 (2.3 ) Balance at December 31, 2018 1,018.6 11.8 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The changes in the balances of each component of accumulated other comprehensive income (loss), net of tax, for the years ended December 31, 2018 and 2017 were as follows: Foreign Currency Translation Adjustments 1 Translation Adjustments on Net Investment Hedge Defined Benefit Pension and Other Postretirement Plans 2 Investment Securities Available-for-Sale 3 Accumulated Other Comprehensive Income (Loss) (in millions) Balance at December 31, 2016 $ (949 ) $ 12 $ 11 $ 2 $ (924 ) Other comprehensive income (loss) 567 (153 ) 14 (1 ) 427 Balance at December 31, 2017 (382 ) (141 ) 25 1 (497 ) Other comprehensive income (loss) (279 ) 75 (15 ) (2 ) (221 ) Balance at December 31, 2018 $ (661 ) $ (66 ) $ 10 $ (1 ) $ (718 ) 1 During 2017, the decrease in the accumulated other comprehensive loss related to foreign currency translation adjustments was driven primarily by the appreciation of the euro. During 2018, the increase in the accumulated other comprehensive loss related to foreign currency translation adjustments was driven primarily by the devaluation of the euro, British pound and Brazilian real. 2 During 2017, the increase in the accumulated other comprehensive gain related to the Company’s postretirement plans was driven primarily by the addition of the Vocalink Plan. Deferred gains related to the Company’s postretirement plans, reclassified from accumulated other comprehensive income (loss) to earnings, were $2 million before tax and $1 million after tax. During 2018, the decrease in the accumulated other comprehensive gain related to the Company’s postretirement plans was driven primarily by an actuarial loss related to the Vocalink Plan. Deferred gains related to the Company’s postretirement plans, reclassified from accumulated other comprehensive income (loss) to earnings, were $1 million before and after tax. See Note 13 (Pension, Postretirement and Savings Plans) for additional information. 3 During 2017 and 2018, gains and losses on available-for-sale investment securities, reclassified from accumulated other comprehensive income (loss) to investment income, were not significant. |
Share-Based Payment and Other_2
Share-Based Payment and Other Benefits (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | |
Schedule of Weighted-Average Assumptions Used in the Valuation of Stock Option Awards | The following table presents the weighted-average assumptions used in the valuation and the resulting weighted-average fair value per option granted for the years ended December 31: 2018 2017 2016 Risk-free rate of return 2.7 % 2.0 % 1.3 % Expected term (in years) 6.00 5.00 5.00 Expected volatility 19.7 % 19.3 % 23.3 % Expected dividend yield 0.6 % 0.8 % 0.8 % Weighted-average fair value per Option granted $ 40.90 $ 21.23 $ 18.58 |
Summary of Stock Option Activity | The following table summarizes the Company’s option activity for the year ended December 31, 2018 : Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (in millions) (in years) (in millions) Outstanding at January 1, 2018 8.6 $ 77 Granted 0.9 $ 173 Exercised (1.8 ) $ 57 Forfeited/expired (0.1 ) $ 112 Outstanding at December 31, 2018 7.6 $ 93 6.4 $ 726 Exercisable at December 31, 2018 4.3 $ 72 5.2 $ 505 Options vested and expected to vest at December 31, 2018 7.6 $ 93 6.4 $ 723 |
Summary of Restricted Stock Unit Activity | The following table summarizes the Company’s RSU activity for the year ended December 31, 2018 : Units Weighted-Average Grant-Date Fair Value Aggregate Intrinsic Value (in millions) (in millions) Outstanding at January 1, 2018 4.1 $ 97 Granted 0.9 $ 171 Converted (1.1 ) $ 90 Forfeited (0.2 ) $ 110 Outstanding at December 31, 2018 3.7 $ 117 $ 702 RSUs expected to vest at December 31, 2018 3.6 $ 116 $ 680 |
Summary of Performance Stock Unit Activity | The following table summarizes the Company’s PSU activity for the year ended December 31, 2018 : Units Weighted-Average Grant-Date Fair Value Aggregate Intrinsic Value (in millions) (in millions) Outstanding at January 1, 2018 0.5 $ 105 Granted 0.1 $ 226 Converted (0.3 ) $ 99 Other 1 0.3 $ 94 Outstanding at December 31, 2018 0.6 $ 120 $ 119 PSUs expected to vest at December 31, 2018 0.6 $ 119 $ 118 1 Represents additional shares issued in March 2018 related to the 2015 PSU grant based on performance and market conditions achieved over the three-year measurement period. These shares vested upon issuance. |
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan | The following table includes additional share-based payment information for each of the years ended December 31: 2018 2017 2016 (in millions, except weighted-average fair value) Share-based compensation expense: Options, RSUs and PSUs $ 196 $ 176 $ 148 Income tax benefit recognized for equity awards 41 57 49 Income tax benefit realized related to Options exercised 53 36 31 Options: Total intrinsic value of Options exercised 242 106 86 RSUs: Weighted-average grant-date fair value of awards granted 171 112 91 Total intrinsic value of RSUs converted into shares of Class A common stock 194 131 122 PSUs: Weighted-average grant-date fair value of awards granted 226 126 92 Total intrinsic value of PSUs converted into shares of Class A common stock 40 13 25 |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Minimum Payments Due Under Non-Cancelable Agreements | At December 31, 2018 , the Company had the following future minimum payments due under non-cancelable agreements: Total Capital Operating Leases Sponsorship, Licensing & Other (in millions) 2019 $ 426 $ 4 $ 72 $ 350 2020 259 4 75 180 2021 175 — 76 99 2022 121 — 68 53 2023 67 — 58 9 Thereafter 327 — 327 — Total $ 1,375 $ 8 $ 676 $ 691 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Domestic and Foreign Income Before Income Taxes | The domestic and foreign components of income before income taxes for the years ended December 31 are as follows: 2018 2017 2016 (in millions) United States $ 3,510 $ 3,482 $ 3,736 Foreign 3,694 3,040 1,910 Income before income taxes $ 7,204 $ 6,522 $ 5,646 |
Components of Income Tax Provision | The total income tax provision for the years ended December 31 is comprised of the following components: 2018 2017 2016 (in millions) Current Federal $ 649 $ 1,704 $ 1,074 State and local 69 65 36 Foreign 871 752 497 1,589 2,521 1,607 Deferred Federal (228 ) 134 (6 ) State and local (11 ) 1 (2 ) Foreign (5 ) (49 ) (12 ) (244 ) 86 (20 ) Income tax expense $ 1,345 $ 2,607 $ 1,587 |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the effective income tax rate to the U.S. federal statutory income tax rate for the years ended December 31, is as follows: 2018 2017 2016 Amount Percent Amount Percent Amount Percent (in millions, except percentages) Income before income taxes $ 7,204 $ 6,522 $ 5,646 Federal statutory tax 1,513 21.0 % 2,283 35.0 % 1,976 35.0 % State tax effect, net of federal benefit 46 0.6 % 43 0.7 % 22 0.4 % Foreign tax effect (92 ) (1.3 )% (380 ) (5.8 )% (188 ) (3.3 )% European Commission fine 194 2.7 % — — % — — % Foreign tax credits 1 (110 ) (1.5 )% (27 ) (0.4 )% (141 ) (2.5 )% Transition Tax 22 0.3 % 629 9.6 % — — % Remeasurement of deferred taxes (7 ) (0.1 )% 157 2.4 % — — % Windfall benefit (72 ) (1.0 )% (43 ) (0.7 )% — — % Other, net (149 ) (2.0 )% (55 ) (0.8 )% (82 ) (1.5 )% Income tax expense $ 1,345 18.7 % $ 2,607 40.0 % $ 1,587 28.1 % 1 Included within the impact of the 2018 foreign tax credits is a $90 million tax benefit relating to the carryback of certain foreign tax credits. Additionally, included in 2016 is a $116 million benefit associated with the repatriation of 2016 foreign earnings. There was no benefit associated with the repatriation of foreign earnings in 2018 and 2017 due to the enactment of U.S. Tax Reform. |
Schedule of Deferred Tax Assets and Liabilities | The components of deferred tax assets and liabilities at December 31 are as follows: 2018 2017 (in millions) Deferred Tax Assets Accrued liabilities $ 297 $ 158 Compensation and benefits 210 127 State taxes and other credits 30 28 Net operating and capital losses 104 105 Unrealized gain/loss - 2015 Euro Notes 28 48 Recoverable basis of deconsolidated entities — 35 Intangible assets 1 170 — Previously taxed earnings and profits 7 — Other items 80 83 Less: Valuation allowance (94 ) (91 ) Total Deferred Tax Assets 832 493 Deferred Tax Liabilities Prepaid expenses and other accruals 89 48 Intangible assets 125 151 Property, plant and equipment 97 83 Previously taxed earnings and profits — 36 Other items 18 31 Total Deferred Tax Liabilities 329 349 Net Deferred Tax Assets $ 503 $ 144 1 On January 1, 2018 a $186 million deferred tax asset was established related to intra-entity transfers as discussed above. |
Reconciliation of Beginning and Ending Tax Benefits | A reconciliation of the beginning and ending balance for the Company’s unrecognized tax benefits for the years ended December 31 , is as follows: 2018 2017 2016 (in millions) Beginning balance $ 183 $ 169 $ 181 Additions: Current year tax positions 23 21 20 Prior year tax positions 5 9 13 Reductions: Prior year tax positions (17 ) (1 ) (28 ) Settlements with tax authorities (18 ) (4 ) (2 ) Expired statute of limitations (12 ) (11 ) (15 ) Ending balance $ 164 $ 183 $ 169 |
Settlement and Other Risk Man_2
Settlement and Other Risk Management (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Settlement and Other Risk Management [Abstract] | |
Estimated Settlement Exposure and Portion of Uncollateralized Settlement Exposure for MasterCard-Branded Transactions | The Company’s estimated settlement exposure was as follows: December 31, December 31, 2017 (in millions) Gross settlement exposure $ 49,666 $ 47,002 Collateral held for settlement exposure (4,711 ) (4,360 ) Net uncollateralized settlement exposure $ 44,955 $ 42,642 |
Foreign Exchange Risk Managem_2
Foreign Exchange Risk Management (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Foreign Currency Derivatives [Abstract] | |
Derivative contract summary | Mastercard’s derivative contracts are summarized below: December 31, 2018 December 31, 2017 Notional Estimated Fair Value Notional Estimated Fair Value (in millions) Commitments to purchase foreign currency $ 34 $ (1 ) $ 27 $ — Commitments to sell foreign currency 1,066 26 968 (26 ) Options to sell foreign currency 25 4 27 2 Balance sheet location Accounts receivable 1 $ — $ 6 Prepaid expenses and other current assets 1 35 — Other current liabilities 1 (6 ) (30 ) 1 The derivative contracts are subject to enforceable master netting arrangements, which contain various netting and setoff provisions. |
Gain (loss) recognized in income for the contracts to purchase and sell foreign currency summary | The amount of gain (loss) recognized on the consolidated statement of operations for the contracts to purchase and sell foreign currency is summarized below: Year Ended December 31, 2018 2017 2016 (in millions) Foreign currency derivative contracts General and administrative $ 53 $ (75 ) $ (6 ) |
Segment Reporting Schedule of P
Segment Reporting Schedule of Property Plant and Equipment, Net by Geographic Region (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Property, Plant and Equipment, Net by Geographical Location | The following table reflects the geographical location of the Company’s property, plant and equipment, net, as of December 31: 2018 2017 2016 (in millions) United States $ 613 $ 572 $ 504 Other countries 308 257 229 Total $ 921 $ 829 $ 733 |
SUMMARY OF QUARTERLY DATA (Un_2
SUMMARY OF QUARTERLY DATA (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Data [Abstract] | |
Schedule of Selected Quarterly Financial Data | 2018 Quarter Ended March 31 June 30 September 30 December 31 2018 Total (in millions, except per share data) Net revenue $ 3,580 $ 3,665 $ 3,898 $ 3,807 $ 14,950 Operating income 1,825 1,936 2,287 1,234 7,282 Net income 1,492 1,569 1,899 899 5,859 Basic earnings per share $ 1.42 $ 1.50 $ 1.83 $ 0.87 $ 5.63 Basic weighted-average shares outstanding 1,051 1,043 1,037 1,032 1,041 Diluted earnings per share $ 1.41 $ 1.50 $ 1.82 $ 0.87 $ 5.60 Diluted weighted-average shares outstanding 1,057 1,049 1,043 1,038 1,047 2017 Quarter Ended March 31 June 30 September 30 December 31 2017 Total (in millions, except per share data) Net revenue $ 2,734 $ 3,053 $ 3,398 $ 3,312 $ 12,497 Operating income 1,506 1,653 1,941 1,522 6,622 Net income 1,081 1,177 1,430 227 3,915 Basic earnings per share $ 1.00 $ 1.10 $ 1.34 $ 0.21 $ 3.67 Basic weighted-average shares outstanding 1,078 1,070 1,063 1,057 1,067 Diluted earnings per share $ 1.00 $ 1.10 $ 1.34 $ 0.21 $ 3.65 Diluted weighted-average shares outstanding 1,082 1,075 1,068 1,063 1,072 Note: Tables may not sum due to rounding. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Advertising and marketing | $ 907 | $ 771 | $ 698 |
General and administrative | 5,174 | 4,653 | 3,827 |
Venezuela charge | 0 | (167) | 0 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Income tax expense | 1,345 | 2,607 | 1,587 |
Gain on non-marketable equity investments | $ 12 | ||
Property, Plant and Equipment [Abstract] | |||
Impact of adoption of new accounting guidance for leases on assets and liabilities (percent) | 2.00% | ||
Buildings | |||
Property, Plant and Equipment [Abstract] | |||
Estimated Useful Life | 30 years | ||
Minimum | |||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Equity Method Investment, Ownership Percentage | 20.00% | ||
Minimum | Building equipment | |||
Property, Plant and Equipment [Abstract] | |||
Estimated Useful Life | 10 years | ||
Minimum | Furniture and fixtures and equipment | |||
Property, Plant and Equipment [Abstract] | |||
Estimated Useful Life | 3 years | ||
Maximum | |||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% | ||
Equity Method Investment, Ownership Percentage | 50.00% | ||
Historical Cost Method Ownership Percentage | 20.00% | ||
Maximum | Building equipment | |||
Property, Plant and Equipment [Abstract] | |||
Estimated Useful Life | 15 years | ||
Maximum | Furniture and fixtures and equipment | |||
Property, Plant and Equipment [Abstract] | |||
Estimated Useful Life | 5 years | ||
Partnership | Minimum | |||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Equity Method Investment, Ownership Percentage | 5.00% | ||
Partnership | Maximum | |||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Historical Cost Method Ownership Percentage | 5.00% | ||
Other | Minimum | |||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Finite-Lived Intangible Assets, Estimated Useful Life | 1 year | ||
Other | Maximum | |||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Finite-Lived Intangible Assets, Estimated Useful Life | 20 years | ||
Venezuela Subsidiaries | |||
Venezuela charge | 167 | ||
Venezuela charge (after tax) | $ 108 | ||
Venezuela charge per diluted share (in dollars per share) | $ 0.10 | ||
Reclassified Expenses | |||
Advertising and marketing | $ (127) | (113) | |
General and administrative | $ 127 | $ 113 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Financial Statement Effects of Topic 606 (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||||
Net revenue | $ 3,807 | $ 3,898 | $ 3,665 | $ 3,580 | $ 3,312 | $ 3,398 | $ 3,053 | $ 2,734 | $ 14,950 | $ 12,497 | $ 10,776 | |
Advertising and marketing | 907 | 771 | 698 | |||||||||
Income before income taxes | 7,204 | 6,522 | 5,646 | |||||||||
Income tax expense | 1,345 | 2,607 | 1,587 | |||||||||
Net Income | 899 | $ 1,899 | $ 1,569 | $ 1,492 | 227 | $ 1,430 | $ 1,177 | $ 1,081 | 5,859 | 3,915 | $ 4,059 | |
Accounts receivable | 2,276 | 1,969 | 2,276 | 1,969 | $ 2,013 | |||||||
Prepaid expenses and other current assets | 1,432 | 1,040 | 1,432 | 1,040 | 1,204 | |||||||
Deferred income taxes | 570 | 250 | 570 | 250 | 367 | |||||||
Other assets | 3,303 | 2,298 | 3,303 | 2,298 | 2,636 | |||||||
Accounts payable | 537 | 933 | 537 | 933 | 438 | |||||||
Accrued expenses | 4,747 | 3,931 | 4,747 | 3,931 | 4,322 | |||||||
Other current liabilities | 949 | 792 | 949 | 792 | 748 | |||||||
Other liabilities | 1,877 | 1,438 | 1,877 | 1,438 | 2,066 | |||||||
Retained earnings | 27,283 | $ 22,364 | 27,283 | $ 22,364 | 22,547 | |||||||
Balances excluding revenue standard | ||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||||
Net revenue | 14,471 | |||||||||||
Advertising and marketing | 743 | |||||||||||
Income before income taxes | 6,889 | |||||||||||
Income tax expense | 1,278 | |||||||||||
Net Income | 5,611 | |||||||||||
Accounts receivable | 2,214 | 2,214 | ||||||||||
Prepaid expenses and other current assets | 1,176 | 1,176 | ||||||||||
Deferred income taxes | 666 | 666 | ||||||||||
Other assets | 2,388 | 2,388 | ||||||||||
Accounts payable | 959 | 959 | ||||||||||
Accrued expenses | 4,375 | 4,375 | ||||||||||
Other current liabilities | 1,085 | 1,085 | ||||||||||
Other liabilities | 1,145 | 1,145 | ||||||||||
Retained earnings | 26,692 | 26,692 | ||||||||||
Impact of revenue standard | Accounting Standards Update 2014-09 | ||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||||
Net revenue | 479 | |||||||||||
Advertising and marketing | 164 | |||||||||||
Income before income taxes | 315 | |||||||||||
Income tax expense | 67 | |||||||||||
Net Income | 248 | |||||||||||
Accounts receivable | 62 | 62 | 44 | |||||||||
Prepaid expenses and other current assets | 256 | 256 | 181 | |||||||||
Deferred income taxes | (96) | (96) | (69) | |||||||||
Other assets | 915 | 915 | 690 | |||||||||
Accounts payable | (422) | (422) | (495) | |||||||||
Accrued expenses | 372 | 372 | 391 | |||||||||
Other current liabilities | (136) | (136) | (44) | |||||||||
Other liabilities | 732 | 732 | 628 | |||||||||
Retained earnings | $ 591 | $ 591 | $ 366 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Cumulative Effect of the Adopted Accounting Pronouncements (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accounts receivable | $ 2,276 | $ 2,013 | $ 1,969 |
Prepaid expenses and other current assets | 1,432 | 1,204 | 1,040 |
Deferred income taxes | 570 | 367 | 250 |
Other assets | 3,303 | 2,636 | 2,298 |
Accounts payable | 537 | 438 | 933 |
Accrued expenses | 4,747 | 4,322 | 3,931 |
Other current liabilities | 949 | 748 | 792 |
Other liabilities | 1,877 | 2,066 | 1,438 |
Retained earnings | 27,283 | 22,547 | $ 22,364 |
Accounting Standards Update 2014-09 | Impact of revenue standard | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accounts receivable | 62 | 44 | |
Prepaid expenses and other current assets | 256 | 181 | |
Deferred income taxes | (96) | (69) | |
Other assets | 915 | 690 | |
Accounts payable | (422) | (495) | |
Accrued expenses | 372 | 391 | |
Other current liabilities | (136) | (44) | |
Other liabilities | 732 | 628 | |
Retained earnings | $ 591 | 366 | |
Accounting Standards Update 2016-16 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accounts receivable | 0 | ||
Prepaid expenses and other current assets | (17) | ||
Deferred income taxes | 186 | ||
Other assets | (352) | ||
Accounts payable | 0 | ||
Accrued expenses | 0 | ||
Other current liabilities | 0 | ||
Other liabilities | 0 | ||
Retained earnings | $ (183) |
Acquisitions Narrative (Details
Acquisitions Narrative (Details) £ in Millions, $ in Millions | Apr. 28, 2017GBP (£) | Apr. 28, 2017USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Business Acquisition [Line Items] | |||||
Total consideration, representing both cash and contingent consideration | $ 1,500 | ||||
Redeemable non-controlling interests | $ 71 | 71 | |||
Goodwill | 2,904 | $ 3,035 | $ 1,756 | ||
Other intangible assets | $ 488 | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 8 years 3 months | ||||
2017 Acquisitions | |||||
Business Acquisition [Line Items] | |||||
Cash consideration | $ 1,286 | ||||
Contingent consideration | 202 | ||||
Redeemable non-controlling interests | 69 | ||||
Gain on previously held minority interest | 14 | ||||
Cash and cash equivalents | 111 | ||||
Other current assets | 110 | ||||
Goodwill | 1,135 | ||||
Other intangible assets | 488 | ||||
Other assets | 91 | ||||
Total assets | 1,935 | ||||
Short-term debt | 64 | ||||
Other current liabilities | 170 | ||||
Net pension liability | 66 | ||||
Other liabilities | 64 | ||||
Total liabilities | 364 | ||||
Total fair value of businesses acquired | 1,571 | ||||
VocaLink Holdings Limited | |||||
Business Acquisition [Line Items] | |||||
Redeemable non-controlling interests | £ 58 | 73 | |||
Vocalink controlling interest | 92.40% | ||||
Cash consideration for Vocalink | £ 719 | $ 929 | |||
Vocalink contingent consideration | £ 169 | 214 | |||
Vocalink's shareholders retained ownership | 7.60% | ||||
Vocalink's shareholders retained ownership minimum holding period | 3 years | 3 years | |||
Developed technologies | |||||
Business Acquisition [Line Items] | |||||
Other intangible assets | $ 319 | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 7 years 6 months | ||||
Customer relationships | |||||
Business Acquisition [Line Items] | |||||
Other intangible assets | $ 166 | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 9 years 11 months | ||||
Other | |||||
Business Acquisition [Line Items] | |||||
Other intangible assets | $ 3 | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 1 year 5 months |
Revenue (Details)
Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Gross revenue | $ 21,831 | ||||||||||
Rebates and incentives (contra-revenue) | (6,881) | ||||||||||
Net revenue | $ 3,807 | $ 3,898 | $ 3,665 | $ 3,580 | $ 3,312 | $ 3,398 | $ 3,053 | $ 2,734 | 14,950 | $ 12,497 | $ 10,776 |
North American Markets | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 5,311 | ||||||||||
International Markets | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 9,441 | ||||||||||
Other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 198 | ||||||||||
Domestic assessments | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Gross revenue | 6,138 | ||||||||||
Cross-border volume fees | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Gross revenue | 4,954 | ||||||||||
Transaction processing | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Gross revenue | 7,391 | ||||||||||
Other revenues | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Gross revenue | $ 3,348 |
Revenue Narrative (Details)
Revenue Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Revenue recognized on performance obligations | $ 904 | |
Revenue, Remaining Performance Obligation, Amount | 1,000 | |
Accounts Receivable | ||
Disaggregation of Revenue [Line Items] | ||
Contract assets | 2,100 | $ 1,900 |
Prepaid expenses and other current assets | ||
Disaggregation of Revenue [Line Items] | ||
Contract assets | 40 | |
Other Assets | ||
Disaggregation of Revenue [Line Items] | ||
Contract assets | 92 | |
Other Current Liabilities | ||
Disaggregation of Revenue [Line Items] | ||
Deferred revenue | 218 | 230 |
Other liabilities | ||
Disaggregation of Revenue [Line Items] | ||
Deferred revenue | $ 101 | $ 17 |
Payment network services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 10 years |
Earnings Per Share Schedule of
Earnings Per Share Schedule of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Numerator: | |||||||||||
Net income | $ 899 | $ 1,899 | $ 1,569 | $ 1,492 | $ 227 | $ 1,430 | $ 1,177 | $ 1,081 | $ 5,859 | $ 3,915 | $ 4,059 |
Denominator: | |||||||||||
Basic weighted-average shares outstanding | 1,032 | 1,037 | 1,043 | 1,051 | 1,057 | 1,063 | 1,070 | 1,078 | 1,041 | 1,067 | 1,098 |
Dilutive stock options and stock units | 6 | 5 | 3 | ||||||||
Diluted weighted-average shares outstanding | 1,038 | 1,043 | 1,049 | 1,057 | 1,063 | 1,068 | 1,075 | 1,082 | 1,047 | 1,072 | 1,101 |
Earnings per Share | |||||||||||
Basic | $ 0.87 | $ 1.83 | $ 1.50 | $ 1.42 | $ 0.21 | $ 1.34 | $ 1.10 | $ 1 | $ 5.63 | $ 3.67 | $ 3.70 |
Diluted | $ 0.87 | $ 1.82 | $ 1.50 | $ 1.41 | $ 0.21 | $ 1.34 | $ 1.10 | $ 1 | $ 5.60 | $ 3.65 | $ 3.69 |
Cash, Cash Equivalents, Restr_3
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 6,682 | $ 5,933 | $ 6,721 | $ 5,747 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Cash, cash equivalents, restricted cash and restricted cash equivalents | 8,337 | 7,592 | 8,273 | 7,193 |
Restricted cash for litigation settlement | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash and restricted cash equivalents | 553 | 546 | 543 | 541 |
Restricted security deposits held for customers | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash and restricted cash equivalents | 1,080 | 1,085 | 991 | 895 |
Prepaid expenses and other current assets | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash and restricted cash equivalents | 22 | 28 | 3 | 0 |
Other assets | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash and restricted cash equivalents | $ 0 | $ 0 | $ 15 | $ 10 |
Supplemental Cash Flows (Non-Ca
Supplemental Cash Flows (Non-Cash Investing and Financing Information) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Supplemental Cash Flow Information [Abstract] | |||
Cash paid for income taxes, net of refunds | $ 1,790 | $ 1,893 | $ 1,579 |
Cash paid for interest | 153 | 135 | 74 |
Cash paid for legal settlements | 260 | 47 | 101 |
Dividends declared but not yet paid | 340 | 263 | 238 |
Capital leases and other | 10 | 30 | 3 |
Fair value of assets acquired, net of cash acquired | 0 | 1,825 | 0 |
Fair value of liabilities assumed related to acquisitions | $ 0 | $ 365 | $ 0 |
Fair Value and Investment Sec_3
Fair Value and Investment Securities Distribution of Financial Instruments, Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Foreign currency derivative assets | $ 35 | $ 6 |
Deferred compensation assets | 54 | 55 |
Foreign currency derivative liabilities | (6) | (30) |
Deferred compensation liabilities | (54) | (54) |
Fair Value, Inputs, Level 1 | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Foreign currency derivative assets | 0 | 0 |
Deferred compensation assets | 54 | 55 |
Foreign currency derivative liabilities | 0 | 0 |
Deferred compensation liabilities | (54) | (54) |
Fair Value, Inputs, Level 2 | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Foreign currency derivative assets | 35 | 6 |
Deferred compensation assets | 0 | 0 |
Foreign currency derivative liabilities | (6) | (30) |
Deferred compensation liabilities | 0 | 0 |
Fair Value, Inputs, Level 3 | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Foreign currency derivative assets | 0 | 0 |
Deferred compensation assets | 0 | 0 |
Foreign currency derivative liabilities | 0 | 0 |
Deferred compensation liabilities | 0 | 0 |
Municipal securities | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Investment securities available for sale | 15 | 17 |
Municipal securities | Fair Value, Inputs, Level 1 | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Investment securities available for sale | 0 | 0 |
Municipal securities | Fair Value, Inputs, Level 2 | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Investment securities available for sale | 15 | 17 |
Municipal securities | Fair Value, Inputs, Level 3 | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Investment securities available for sale | 0 | 0 |
Government and agency securities | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Investment securities available for sale | 157 | 185 |
Government and agency securities | Fair Value, Inputs, Level 1 | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Investment securities available for sale | 65 | 81 |
Government and agency securities | Fair Value, Inputs, Level 2 | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Investment securities available for sale | 92 | 104 |
Government and agency securities | Fair Value, Inputs, Level 3 | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Investment securities available for sale | 0 | 0 |
Corporate securities | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Investment securities available for sale | 1,043 | 876 |
Corporate securities | Fair Value, Inputs, Level 1 | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Investment securities available for sale | 0 | 0 |
Corporate securities | Fair Value, Inputs, Level 2 | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Investment securities available for sale | 1,043 | 876 |
Corporate securities | Fair Value, Inputs, Level 3 | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Investment securities available for sale | 0 | 0 |
Asset-backed securities | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Investment securities available for sale | 217 | 70 |
Asset-backed securities | Fair Value, Inputs, Level 1 | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Investment securities available for sale | 0 | 0 |
Asset-backed securities | Fair Value, Inputs, Level 2 | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Investment securities available for sale | 217 | 70 |
Asset-backed securities | Fair Value, Inputs, Level 3 | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Investment securities available for sale | 0 | 0 |
Equity securities | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Investment securities available for sale | 0 | 1 |
Equity securities | Fair Value, Inputs, Level 1 | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Investment securities available for sale | 0 | 1 |
Equity securities | Fair Value, Inputs, Level 2 | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Investment securities available for sale | 0 | 0 |
Equity securities | Fair Value, Inputs, Level 3 | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Investment securities available for sale | $ 0 | $ 0 |
Fair Value and Investment Sec_4
Fair Value and Investment Securities Narrative Fair Value (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt, Long-term and Short-term, Combined Amount | $ 6,334 | $ 5,424 |
Long-term debt, carrying value | 5,834 | 5,424 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | 6,500 | 5,700 |
Short-Term Investments | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Held-to-maturity Securities | 264 | $ 700 |
Contingent Consideration | Fair Value, Inputs, Level 3 | ||
Contingent Consideration [Roll Forward] | ||
Contingent consideration attributable to acquisitions, beginning | 219 | |
Net change in valuation | 19 | |
Payments | (5) | |
Foreign currency translation | (14) | |
Contingent consideration attributable to acquisitions, ending | $ 219 |
Fair Value and Investment Sec_5
Fair Value and Investment Securities Available-for-Sale Investment Securities, Unrealized Gains and Losses (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Investment Identifier [Line Items] | ||
Amortized Cost | $ 1,433 | $ 1,147 |
Gross Unrealized Gain | 1 | 3 |
Gross Unrealized Loss | (2) | (1) |
Fair Value | 1,432 | 1,149 |
Municipal securities | ||
Investment Identifier [Line Items] | ||
Amortized Cost | 15 | 17 |
Gross Unrealized Gain | 0 | 0 |
Gross Unrealized Loss | 0 | 0 |
Fair Value | 15 | 17 |
Government and agency securities | ||
Investment Identifier [Line Items] | ||
Amortized Cost | 157 | 185 |
Gross Unrealized Gain | 0 | 0 |
Gross Unrealized Loss | 0 | 0 |
Fair Value | 157 | 185 |
Corporate securities | ||
Investment Identifier [Line Items] | ||
Amortized Cost | 1,044 | 875 |
Gross Unrealized Gain | 1 | 2 |
Gross Unrealized Loss | (2) | (1) |
Fair Value | 1,043 | 876 |
Asset-backed securities | ||
Investment Identifier [Line Items] | ||
Amortized Cost | 217 | 70 |
Gross Unrealized Gain | 0 | 0 |
Gross Unrealized Loss | 0 | 0 |
Fair Value | 217 | 70 |
Equity securities | ||
Investment Identifier [Line Items] | ||
Amortized Cost | 0 | 0 |
Gross Unrealized Gain | 0 | 1 |
Gross Unrealized Loss | 0 | 0 |
Fair Value | $ 0 | $ 1 |
Fair Value and Investment Sec_6
Fair Value and Investment Securities Maturity Distribution Based on Contractual Terms of Investment Securities (Details) $ in Millions | Dec. 31, 2018USD ($) |
Available-For-Sale Amortized Cost | |
Due within 1 year | $ 376 |
Due after 1 year through 5 years | 1,056 |
Due after 5 years through 10 years | 1 |
Total | 1,433 |
Available-For-Sale Fair Value | |
Due within 1 year | 376 |
Due after 1 year through 5 years | 1,055 |
Due after 5 years through 10 years | 1 |
Total | $ 1,432 |
Prepaid Expenses and Other As_3
Prepaid Expenses and Other Assets Schedule of Prepaid Expenses (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Prepaid Expense and Other Assets [Abstract] | |||
Customer and merchant incentives | $ 778 | $ 464 | |
Prepaid income taxes | 51 | 77 | |
Other | 603 | 499 | |
Total prepaid expenses and other current assets | $ 1,432 | $ 1,204 | $ 1,040 |
Prepaid Expenses and Other As_4
Prepaid Expenses and Other Assets Schedule of Other Assets (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Prepaid Expense and Other Assets [Abstract] | |||
Customer and merchant incentives | $ 2,458 | $ 1,434 | |
Nonmarketable equity investments | 337 | 249 | |
Prepaid income taxes | 0 | 352 | |
Income taxes receivable | 298 | 178 | |
Other | 210 | 85 | |
Total other assets | $ 3,303 | $ 2,636 | $ 2,298 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | $ 1,768 | $ 1,543 | |
Less: accumulated depreciation and amortization | (847) | (714) | |
Property, plant and equipment, net | 921 | 829 | $ 733 |
Building, building equipment and land | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | 481 | 455 | |
Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | 987 | 841 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | 85 | 81 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | $ 215 | $ 166 |
Property, Plant and Equipment N
Property, Plant and Equipment Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Capital leases included in equipment | $ 33 | $ 32 | |
Accumulated amortization, capital leases | 24 | 18 | |
Depreciation expense including amortization for capital leases | $ 209 | $ 185 | $ 151 |
Change in Carrying Amount of Go
Change in Carrying Amount of Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 3,035 | $ 1,756 |
Additions | 2 | 1,136 |
Foreign currency translation | (133) | 143 |
Ending balance | $ 2,904 | $ 3,035 |
Other Intangible Assets (Schedu
Other Intangible Assets (Schedule of Intangible Assets) (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Gross Carrying Amount | $ 1,999 | $ 2,102 |
Accumulated Amortization | (1,175) | (1,157) |
Net Carrying Amount | 824 | 945 |
Unamortized intangible assets: | ||
Intangible Assets, Gross (Excluding Goodwill) | 2,166 | 2,277 |
Accumulated Amortization | (1,175) | (1,157) |
Net Carrying Amount | 991 | 1,120 |
Capitalized software | ||
Gross Carrying Amount | 1,514 | 1,572 |
Accumulated Amortization | (898) | (888) |
Net Carrying Amount | 616 | 684 |
Customer relationships | ||
Gross Carrying Amount | 439 | 473 |
Accumulated Amortization | (232) | (214) |
Net Carrying Amount | 207 | 259 |
Unamortized intangible assets: | ||
Customer relationships | 167 | 175 |
Other | ||
Gross Carrying Amount | 46 | 57 |
Accumulated Amortization | (45) | (55) |
Net Carrying Amount | $ 1 | $ 2 |
Other Intangible Assets (Narrat
Other Intangible Assets (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Amortization expense on intangible assets | $ 250 | $ 252 | $ 221 |
Other Intangible Assets (Sche_2
Other Intangible Assets (Schedule of Estimated Future Amortization Expense) (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
2,019 | $ 248 | |
2,020 | 187 | |
2,021 | 127 | |
2,022 | 51 | |
2023 and thereafter | 211 | |
Net Carrying Amount | $ 824 | $ 945 |
Accrued Expenses and Accrued _3
Accrued Expenses and Accrued Litigation (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Accrued Liabilities [Abstract] | |||
Customer and merchant incentives | $ 3,275 | $ 2,648 | |
Personnel costs | 744 | 613 | |
Advertising | 103 | 88 | |
Income and other taxes | 158 | 194 | |
Other | 467 | 388 | |
Total accrued expenses | $ 4,747 | $ 4,322 | $ 3,931 |
Accrued Expenses and Accrued _4
Accrued Expenses and Accrued Litigation Accrued Expenses and Accrued Litigation (Narrative) (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Accrued Liabilities [Abstract] | ||
Accrued litigation | $ 1,591 | $ 709 |
Pension, Postretirement and S_3
Pension, Postretirement and Savings Plans Narrative (Details) £ in Millions, $ in Millions | 12 Months Ended | ||||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2018GBP (£) | Dec. 31, 2018USD ($) | |
Defined Benefit Plan, Plan Assets, Amount | $ 427 | $ 410 | |||
Total expense related to defined contribution plans | $ 98 | 84 | $ 73 | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||||
Defined Benefit Plan, Projected Benefit Obligation, Period Increase (Decrease) | $ 30 | $ 422 | |||
Health care cost trend rate assumed for next year | 6.50% | 6.00% | 6.00% | ||
Ultimate trend rate | 5.00% | 5.00% | 5.00% | ||
Year that the rate reaches the ultimate trend rate | 2 years | 3 years | |||
Defined Benefit Plan, Expected Future Benefit Payment, 2019 | $ 14 | ||||
Defined Benefit Plan, Expected Future Benefit Payment, 2020 | 10 | ||||
Defined Benefit Plan, Expected Future Benefit Payment, 2021 | 11 | ||||
Defined Benefit Plan, Expected Future Benefit Payment, 2022 | 14 | ||||
Defined Benefit Plan, Expected Future Benefit Payment, 2023 | 13 | ||||
Defined Benefit Plan, Expected Future Benefit Payment, 2024-2028 | 64 | ||||
Cash and cash equivalents | |||||
Defined Benefit Plan, Plan Assets, Amount | $ 21 | 22 | |||
Government and agency securities | |||||
Defined Benefit Plan, Plan Assets, Amount | 116 | 88 | |||
Mutual funds | |||||
Defined Benefit Plan, Plan Assets, Amount | 174 | 184 | |||
Asset-backed securities | |||||
Defined Benefit Plan, Plan Assets, Amount | 31 | 34 | |||
Insurance contracts | |||||
Defined Benefit Plan, Plan Assets, Amount | 45 | 57 | |||
Other | |||||
Defined Benefit Plan, Plan Assets, Amount | 40 | 25 | |||
Other Postretirement Benefits Plan | |||||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 | 0 | ||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||||
Benefit Obligation, beginning | $ 61 | 59 | |||
Benefit obligation acquired during the year | 0 | 0 | |||
Service cost | 1 | 1 | 1 | ||
Interest cost | 2 | 2 | 2 | ||
Actuarial (gain) loss | (2) | 3 | |||
Benefits paid | (5) | (4) | |||
Transfers in | 0 | 0 | |||
Foreign currency translation | 0 | 0 | |||
Benefit Obligation, ending | 57 | 61 | 59 | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||||
Fair value of plan assets acquired during the year | 0 | 0 | |||
Actual (loss) gain on plan assets | 0 | 0 | |||
Employer contributions | 5 | 4 | |||
Benefits paid | (5) | (4) | |||
Transfers in | 0 | 0 | |||
Foreign currency translation | 0 | 0 | |||
Funded status at end of year | (61) | (57) | |||
Other liabilities, short-term | (3) | (3) | |||
Other liabilities, long-term | (58) | (54) | |||
Total amounts recognized on the consolidated balance sheet | (61) | (57) | |||
Net actuarial (gain) loss | (5) | (7) | |||
Prior service credit | (8) | (6) | |||
Balance at end of year | $ (13) | $ (13) | |||
Weighted-average assumptions used to determine end of year benefit obligations, Discount Rate | 3.50% | 4.25% | 4.25% | ||
Weighted-average assumptions used to determine end of year benefit obligations, rate of compensation increase | 3.00% | 3.00% | 3.00% | ||
Expected return on plan assets | 0 | $ 0 | 0 | ||
Curtailment gain | 0 | 0 | 0 | ||
Amortization of actuarial loss | 0 | 0 | 0 | ||
Amortization of prior service credit | (2) | (2) | (1) | ||
Pension settlement charge | 0 | 0 | 0 | ||
Net periodic benefit cost | 1 | 1 | 2 | ||
Curtailment gain | 0 | 0 | 0 | ||
Current year actuarial loss (gain) | (2) | 5 | 0 | ||
Current year prior service credit | 0 | 0 | 0 | ||
Amortization of prior service credit | 2 | 2 | 1 | ||
Pension settlement charge | 0 | 0 | 0 | ||
Total other comprehensive loss (income) | 0 | 7 | 1 | ||
Total net periodic benefit cost and other comprehensive loss (income) | $ 1 | $ 8 | $ 3 | ||
Weighted-average assumptions used to determine end of year net periodic benefit, Discount rate | 3.50% | 4.00% | 4.25% | ||
Weighted-average assumptions used to determine end of year net periodic benefit, Rate of compensation increase | 3.00% | 3.00% | 3.00% | ||
Defined Benefit Plan, Expected Future Benefit Payment, 2019 | $ 3 | ||||
Defined Benefit Plan, Expected Future Benefit Payment, 2020 | 4 | ||||
Defined Benefit Plan, Expected Future Benefit Payment, 2021 | 4 | ||||
Defined Benefit Plan, Expected Future Benefit Payment, 2022 | 4 | ||||
Defined Benefit Plan, Expected Future Benefit Payment, 2023 | 4 | ||||
Defined Benefit Plan, Expected Future Benefit Payment, 2024-2028 | 20 | ||||
Pension Plan | |||||
Defined Benefit Plan, Plan Assets, Amount | $ 33 | 410 | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||||
Benefit Obligation, beginning | $ 468 | $ 46 | |||
Benefit obligation acquired during the year | 0 | 410 | |||
Service cost | 9 | 9 | 10 | ||
Interest cost | 12 | 8 | 1 | ||
Actuarial (gain) loss | (7) | (44) | |||
Benefits paid | (22) | (12) | |||
Transfers in | 1 | 3 | |||
Foreign currency translation | (23) | 48 | |||
Benefit Obligation, ending | 438 | 468 | 46 | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||||
Fair value of plan assets acquired during the year | 0 | 344 | |||
Actual (loss) gain on plan assets | (8) | (4) | |||
Employer contributions | 33 | 23 | |||
Benefits paid | (23) | (12) | |||
Transfers in | 2 | 3 | |||
Foreign currency translation | (21) | 40 | |||
Funded status at end of year | (41) | (28) | |||
Other liabilities, short-term | 0 | 0 | |||
Other liabilities, long-term | (41) | (28) | |||
Total amounts recognized on the consolidated balance sheet | (41) | (28) | |||
Net actuarial (gain) loss | (22) | (5) | |||
Prior service credit | 0 | 1 | |||
Balance at end of year | (22) | (4) | |||
Projected benefit obligation | 468 | 438 | |||
Accumulated benefit obligation | 428 | 430 | |||
Fair value of plan assets | 427 | $ 410 | |||
Expected return on plan assets | (20) | (13) | (1) | ||
Curtailment gain | 0 | 0 | 0 | ||
Amortization of actuarial loss | 0 | 0 | 0 | ||
Amortization of prior service credit | 0 | 0 | 0 | ||
Pension settlement charge | 0 | 0 | 0 | ||
Net periodic benefit cost | 1 | 4 | 10 | ||
Curtailment gain | 0 | 0 | 0 | ||
Current year actuarial loss (gain) | 17 | (22) | 1 | ||
Current year prior service credit | 1 | 0 | 0 | ||
Amortization of prior service credit | 0 | 0 | 0 | ||
Pension settlement charge | 0 | 0 | 0 | ||
Total other comprehensive loss (income) | 18 | (22) | 1 | ||
Total net periodic benefit cost and other comprehensive loss (income) | $ 19 | $ (18) | $ 11 | ||
Pension Plan | Other countries | |||||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||||
Weighted-average assumptions used to determine end of year benefit obligations, Discount Rate | 1.80% | 1.80% | 1.80% | ||
Weighted-average assumptions used to determine end of year benefit obligations, rate of compensation increase | 2.60% | 2.60% | 2.60% | ||
Weighted-average assumptions used to determine end of year net periodic benefit, Discount rate | 1.80% | 1.60% | 1.85% | ||
Weighted-average assumptions used to determine end of year net periodic benefit, Expected return on plan assets | 3.00% | 3.25% | 3.25% | ||
Weighted-average assumptions used to determine end of year net periodic benefit, Rate of compensation increase | 2.60% | 2.59% | 2.64% | ||
Fair Value, Inputs, Level 1 | |||||
Defined Benefit Plan, Plan Assets, Amount | $ 190 | $ 176 | |||
Fair Value, Inputs, Level 1 | Cash and cash equivalents | |||||
Defined Benefit Plan, Plan Assets, Amount | 21 | 22 | |||
Fair Value, Inputs, Level 1 | Government and agency securities | |||||
Defined Benefit Plan, Plan Assets, Amount | 21 | 0 | |||
Fair Value, Inputs, Level 1 | Mutual funds | |||||
Defined Benefit Plan, Plan Assets, Amount | 146 | 154 | |||
Fair Value, Inputs, Level 1 | Asset-backed securities | |||||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 | |||
Fair Value, Inputs, Level 1 | Insurance contracts | |||||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 | |||
Fair Value, Inputs, Level 1 | Other | |||||
Defined Benefit Plan, Plan Assets, Amount | 2 | 0 | |||
Fair Value, Inputs, Level 2 | |||||
Defined Benefit Plan, Plan Assets, Amount | 184 | 200 | |||
Fair Value, Inputs, Level 2 | Cash and cash equivalents | |||||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 | |||
Fair Value, Inputs, Level 2 | Government and agency securities | |||||
Defined Benefit Plan, Plan Assets, Amount | 95 | 88 | |||
Fair Value, Inputs, Level 2 | Mutual funds | |||||
Defined Benefit Plan, Plan Assets, Amount | 28 | 30 | |||
Fair Value, Inputs, Level 2 | Asset-backed securities | |||||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 | |||
Fair Value, Inputs, Level 2 | Insurance contracts | |||||
Defined Benefit Plan, Plan Assets, Amount | 45 | 57 | |||
Fair Value, Inputs, Level 2 | Other | |||||
Defined Benefit Plan, Plan Assets, Amount | 16 | 25 | |||
Fair Value, Inputs, Level 3 | |||||
Defined Benefit Plan, Plan Assets, Amount | 53 | 34 | |||
Fair Value, Inputs, Level 3 | Cash and cash equivalents | |||||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 | |||
Fair Value, Inputs, Level 3 | Government and agency securities | |||||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 | |||
Fair Value, Inputs, Level 3 | Mutual funds | |||||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 | |||
Fair Value, Inputs, Level 3 | Asset-backed securities | |||||
Defined Benefit Plan, Plan Assets, Amount | 31 | 34 | |||
Fair Value, Inputs, Level 3 | Insurance contracts | |||||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 | |||
Fair Value, Inputs, Level 3 | Other | |||||
Defined Benefit Plan, Plan Assets, Amount | $ 22 | 0 | |||
Vocalink Plan | |||||
Expected future employer contributions | £ 15 | $ 18 | |||
Vocalink Plan | Non-government fixed income | |||||
Plan assets, target allocation (percent) | 39.00% | 39.00% | |||
Vocalink Plan | Government and agency securities | |||||
Plan assets, target allocation (percent) | 28.00% | 28.00% | |||
Vocalink Plan | Investment funds | |||||
Plan assets, target allocation (percent) | 25.00% | 25.00% | |||
Vocalink Plan | Other | |||||
Plan assets, target allocation (percent) | 8.00% | 8.00% | |||
Vocalink Plan | Derivative | |||||
Plan assets, actual allocation (percent) | 44.00% | 44.00% | |||
Vocalink Plan | Equity | |||||
Plan assets, actual allocation (percent) | 28.00% | 28.00% | |||
Vocalink Plan | Fixed Income Funds | |||||
Plan assets, actual allocation (percent) | 16.00% | 16.00% | |||
Vocalink Plan | Other investment funds | |||||
Plan assets, actual allocation (percent) | 12.00% | 12.00% | |||
Vocalink Plan | Pension Plan | |||||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||||
Weighted-average assumptions used to determine end of year benefit obligations, Discount Rate | 2.80% | 3.10% | 3.10% | ||
Weighted-average assumptions used to determine end of year benefit obligations, rate of compensation increase | 3.85% | 4.00% | 4.00% | ||
Weighted-average assumptions used to determine end of year net periodic benefit, Discount rate | 2.80% | 2.50% | |||
Weighted-average assumptions used to determine end of year net periodic benefit, Expected return on plan assets | 4.75% | 4.75% | |||
Weighted-average assumptions used to determine end of year net periodic benefit, Rate of compensation increase | 3.85% | 3.95% |
Debt (Details)
Debt (Details) € in Millions | 1 Months Ended | |||||||||
Feb. 28, 2018USD ($) | Nov. 30, 2016USD ($) | Dec. 31, 2015USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2018EUR (€) | Nov. 15, 2018USD ($) | Feb. 26, 2018USD ($) | Jan. 01, 2018USD ($) | Dec. 31, 2017USD ($) | |
Less: Unamortized discount and debt issuance costs | $ (55,000,000) | $ (53,000,000) | ||||||||
Debt, Long-term and Short-term, Combined Amount | 6,334,000,000 | 5,424,000,000 | ||||||||
Current portion of long-term debt | 500,000,000 | 0 | ||||||||
Long-term debt | 5,834,000,000 | 5,424,000,000 | ||||||||
Long-term Debt, Maturities, Repayments of Principal in 2019 | 500,000,000 | |||||||||
Long-term Debt, Maturities, Repayments of Principal in 2020 | 0 | |||||||||
Long-term Debt, Maturities, Repayments of Principal in 2021 | 650,000,000 | |||||||||
Long-term Debt, Maturities, Repayments of Principal in 2022 | 801,000,000 | |||||||||
Long-term Debt, Maturities, Repayments of Principal in 2023 | 0 | |||||||||
Thereafter | 4,438,000,000 | |||||||||
Aggregate principal amount | 6,389,000,000 | 5,477,000,000 | ||||||||
Commercial Paper Program | 4,500,000,000 | $ 3,750,000,000 | ||||||||
Other current liabilities | 949,000,000 | $ 748,000,000 | 792,000,000 | |||||||
Revolving Credit Facility | ||||||||||
Credit Facility | 4,500,000,000 | $ 3,750,000,000 | ||||||||
Senior Notes | 2028 Notes | ||||||||||
Aggregate Principal Amount | $ 500,000,000 | $ 500,000,000 | 0 | |||||||
Stated Interest Rate | 3.50% | 3.50% | ||||||||
Effective Interest Rate | 3.598% | 3.598% | ||||||||
Senior Notes | 2048 Notes | ||||||||||
Aggregate Principal Amount | $ 500,000,000 | 500,000,000 | 0 | |||||||
Stated Interest Rate | 3.95% | 3.95% | ||||||||
Effective Interest Rate | 3.99% | 3.99% | ||||||||
Senior Notes | 2018 USD Notes | ||||||||||
Aggregate Principal Amount | $ 1,000,000,000 | |||||||||
Proceeds from issuance of long-term debt | $ 991,000,000 | |||||||||
Senior Notes | 2016 issued USD Notes maturing in 2021 | ||||||||||
Aggregate Principal Amount | $ 650,000,000 | 650,000,000 | ||||||||
Stated Interest Rate | 2.00% | 2.00% | ||||||||
Effective Interest Rate | 2.236% | 2.236% | ||||||||
Senior Notes | 2016 issued USD Notes maturing in 2026 | ||||||||||
Aggregate Principal Amount | $ 750,000,000 | 750,000,000 | ||||||||
Stated Interest Rate | 2.95% | 2.95% | ||||||||
Effective Interest Rate | 3.044% | 3.044% | ||||||||
Senior Notes | 2016 issued USD Notes maturing in 2046 | ||||||||||
Aggregate Principal Amount | $ 600,000,000 | 600,000,000 | ||||||||
Stated Interest Rate | 3.80% | 3.80% | ||||||||
Effective Interest Rate | 3.893% | 3.893% | ||||||||
Senior Notes | 2016 USD Notes | ||||||||||
Aggregate Principal Amount | $ 2,000,000,000 | |||||||||
Proceeds from issuance of long-term debt | $ 1,969,000,000 | |||||||||
Senior Notes | 2015 issued Euro Notes maturing in 2022 | ||||||||||
Aggregate Principal Amount | $ 801,000,000 | € 700 | 839,000,000 | |||||||
Stated Interest Rate | 1.10% | 1.10% | ||||||||
Effective Interest Rate | 1.265% | 1.265% | ||||||||
Senior Notes | 2015 issued Euro Notes maturing in 2027 | ||||||||||
Aggregate Principal Amount | $ 916,000,000 | € 800 | 958,000,000 | |||||||
Stated Interest Rate | 2.10% | 2.10% | ||||||||
Effective Interest Rate | 2.189% | 2.189% | ||||||||
Senior Notes | 2015 issued Euro Notes maturing in 2030 | ||||||||||
Aggregate Principal Amount | $ 172,000,000 | € 150 | 180,000,000 | |||||||
Stated Interest Rate | 2.50% | 2.50% | ||||||||
Effective Interest Rate | 2.562% | 2.562% | ||||||||
Senior Notes | 2015 Euro Notes | ||||||||||
Aggregate Principal Amount | € | € 1,650 | |||||||||
Proceeds from issuance of long-term debt | $ 1,723,000,000 | |||||||||
Senior Notes | 2014 USD Notes | ||||||||||
Aggregate Principal Amount | $ 1,500,000,000 | |||||||||
Proceeds from issuance of long-term debt | $ 1,484,000,000 | |||||||||
Senior Notes | 2014 issued USD Notes maturing in 2019 | ||||||||||
Aggregate Principal Amount | $ 500,000,000 | 500,000,000 | ||||||||
Stated Interest Rate | 2.00% | 2.00% | ||||||||
Effective Interest Rate | 2.178% | 2.178% | ||||||||
Current portion of long-term debt | $ 500,000,000 | |||||||||
Senior Notes | 2014 issued USD Notes maturing in 2024 | ||||||||||
Aggregate Principal Amount | $ 1,000,000,000 | $ 1,000,000,000 | ||||||||
Stated Interest Rate | 3.375% | 3.375% | ||||||||
Effective Interest Rate | 3.484% | 3.484% |
Stockholders' Equity (Narrative
Stockholders' Equity (Narrative) (Details) - Mastercard Foundation shares in Millions | 5 Months Ended |
May 31, 2006shares | |
Required Disbursement by charitable entity | 3.50% |
Class A Common Stock | |
Equity Sale Restriction Period | 20 years 11 months |
Issuance and donation of shares | 135 |
Stockholders' Equity (Schedule
Stockholders' Equity (Schedule of Classes of Capital Stock) (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Public Investors (Class A Stockholders) | ||
Equity Ownership | 88.00% | 88.00% |
General Voting Power | 89.00% | 89.20% |
Principal or Affiliate Members (Class B Stockholders) | ||
Equity Ownership | 1.10% | 1.40% |
General Voting Power | 0.00% | 0.00% |
The MasterCard Foundation (Class A Stockholders) | ||
Equity Ownership | 10.90% | 10.60% |
General Voting Power | 11.00% | 10.80% |
Class A Common Stock | ||
Common Stock, Par Value Per Share | $ 0.0001 | $ 0.0001 |
Common Stock, Authorized Shares | 3,000,000,000 | 3,000,000,000 |
Class B Common Stock | ||
Common Stock, Par Value Per Share | $ 0.0001 | $ 0.0001 |
Common Stock, Authorized Shares | 1,200,000,000 | 1,200,000,000 |
Preferred Stock | ||
Preferred Stock, Par Value Per Share | $ 0.0001 | |
Preferred Stock, Authorized Shares | 300,000,000 |
Stockholders' Equity (Schedul_2
Stockholders' Equity (Schedule of Share Repurchase Authorizations) (Details) - Class A Common Stock - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | 13 Months Ended | 25 Months Ended | 37 Months Ended | 49 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2015 | Dec. 31, 2014 | |
Class of Stock [Line Items] | |||||||||
Board Authorization | $ 22,250 | $ 22,250 | $ 22,250 | $ 22,250 | $ 22,250 | ||||
Dollar-value of shares repurchased | 4,933 | $ 3,762 | $ 3,511 | ||||||
Remaining authorization | $ 6,801 | $ 5,234 | $ 4,996 | 6,801 | 6,801 | 6,801 | $ 6,801 | ||
Shares repurchased | 26.2 | 30.1 | 36.9 | 128.4 | |||||
Average price paid per share | $ 188.26 | $ 125.05 | $ 95.18 | $ 120.44 | |||||
December 2014 Share Repurchase Plan | |||||||||
Class of Stock [Line Items] | |||||||||
Board Authorization | $ 3,750 | ||||||||
Dollar-value of shares repurchased | $ 0 | $ 0 | $ 507 | ||||||
Remaining authorization | $ 0 | $ 0 | $ 0 | 0 | 0 | 0 | $ 0 | ||
Shares repurchased | 0 | 0 | 5.7 | 40.8 | |||||
Average price paid per share | $ 0 | $ 0 | $ 89.76 | $ 92.03 | |||||
December 2015 Share Repurchase Plan | |||||||||
Class of Stock [Line Items] | |||||||||
Board Authorization | $ 4,000 | ||||||||
Dollar-value of shares repurchased | $ 0 | $ 996 | $ 3,004 | ||||||
Remaining authorization | $ 0 | $ 0 | $ 996 | 0 | 0 | $ 0 | $ 0 | ||
Shares repurchased | 0 | 9.1 | 31.2 | 40.4 | |||||
Average price paid per share | $ 0 | $ 109.16 | $ 96.15 | $ 99.10 | |||||
December 2016 Share Repurchase Plan | |||||||||
Class of Stock [Line Items] | |||||||||
Board Authorization | $ 4,000 | ||||||||
Dollar-value of shares repurchased | $ 1,234 | $ 2,766 | |||||||
Remaining authorization | $ 0 | $ 1,234 | $ 4,000 | 0 | $ 0 | $ 0 | 0 | ||
Shares repurchased | 7.2 | 21 | 28.2 | ||||||
Average price paid per share | $ 171.11 | $ 131.97 | $ 141.99 | ||||||
December 2017 Share Repurchase Plan | |||||||||
Class of Stock [Line Items] | |||||||||
Board Authorization | $ 4,000 | ||||||||
Dollar-value of shares repurchased | $ 3,699 | ||||||||
Remaining authorization | $ 301 | $ 4,000 | $ 301 | $ 301 | 301 | 301 | |||
Shares repurchased | 19 | 19 | |||||||
Average price paid per share | $ 194.77 | $ 194.77 | |||||||
December 2018 Share Repurchase Plan | |||||||||
Class of Stock [Line Items] | |||||||||
Board Authorization | $ 6,500 | $ 6,500 | 6,500 | 6,500 | 6,500 | ||||
Remaining authorization | $ 6,500 | $ 6,500 | $ 6,500 | $ 6,500 | $ 6,500 |
Stockholders' Equity Statement
Stockholders' Equity Statement of Changes in Common Shares Outstanding (Details) - shares shares in Millions | 12 Months Ended | 49 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | |
Class A Common Stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Purchases of treasury stock | (26.2) | (30.1) | (36.9) | (128.4) |
Common Stock | Class A Common Stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Balance | 1,039.7 | 1,062.4 | 1,095 | |
Purchases of treasury stock | (26.2) | (30.1) | (36.9) | |
Share-based payments | 2.8 | 2.2 | 2.3 | |
Conversion of Class B to Class A common stock | 2.3 | 5.2 | 2 | |
Balance | 1,018.6 | 1,039.7 | 1,062.4 | 1,018.6 |
Common Stock | Class B Common Stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Balance | 14.1 | 19.3 | 21.3 | |
Conversion of Class B to Class A common stock | (2.3) | (5.2) | (2) | |
Balance | 11.8 | 14.1 | 19.3 | 11.8 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax | $ (661) | $ (382) | $ (949) |
Accumulated Comprehensive Income Loss Translation Adjustments on Net Investment Hedge, Net of Tax | (66) | (141) | 12 |
Accumulated Other Comprehensive Income (Loss), Defined Benefit Pension and Other Postretirement Plans, Net of Tax | 10 | 25 | 11 |
Accumulated Other Comprehensive Income (Loss), Investment Securities Available-for-Sale Securities, Net of Tax | (1) | 1 | 2 |
Accumulated Other Comprehensive Income (Loss), Net of Tax | (718) | (497) | (924) |
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustments, Net of Tax | (279) | 567 | (286) |
Other Comprehensive Income Loss Translation Adjustments on Net Investment Hedge, Net of Tax | 75 | (153) | 38 |
Other Comprehensive Income (Loss), Defined Benefit Pension and Other Postretirement Plans, Net of Tax | (15) | 14 | |
Other Comprehensive Income (Loss), Investment Securities Available-for-Sale, Net of Tax | (2) | (1) | |
Accumulated Other Comprehensive Income (Loss), Net of Tax | (221) | 427 | $ (248) |
Other Comprehensive (Income) Loss, Defined Benefit Plan, Reclassification Adjustment from AOCI, after Tax | 1 | 1 | |
Reclassification adjustment for defined benefit pension and other postretirement plans | $ 1 | $ 2 |
Share-Based Payment and Other_3
Share-Based Payment and Other Benefits (Narrative) (Details) - USD ($) shares in Millions, $ in Millions | 2 Months Ended | 12 Months Ended |
Feb. 28, 2017 | Dec. 31, 2018 | |
Restricted Stock Units (RSUs) | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period | 3 years | |
Unrecognized compensation cost | $ 153 | |
Period over which unrecognized cost will be recognized, in years | 1 year 8 months | |
Long-Term Incentive Plan | Class A Common Stock | ||
Shares reserve for future issuance | 116 | |
Stock Option | ||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period | 4 years | |
Unrecognized compensation cost | $ 34 | |
Period over which unrecognized cost will be recognized, in years | 2 years 1 month | |
Performance-Based Restricted Stock | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period | 3 years | |
Unrecognized compensation cost | $ 13 | |
Period over which unrecognized cost will be recognized, in years | 1 year 4 months | |
Vesting period for retirement or disability | Performance stock units | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period | 6 months | 7 months |
Minimum vesting from date of retirement eligibility | Performance stock units | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period | 6 months | 7 months |
Share-Based Payment and Other_4
Share-Based Payment and Other Benefits (Schedule of Weighted-Average Assumptions Used in the Valuation of Awards) (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free rate of return | 2.70% | 2.00% | 1.30% |
Expected term (in years) | 6 years | 5 years | 5 years |
Expected volatility | 19.70% | 19.30% | 23.30% |
Expected dividend yield | 0.60% | 0.80% | 0.80% |
Weighted-average fair value per option granted | $ 40.90 | $ 21.23 | $ 18.58 |
Share-Based Payment and Other_5
Share-Based Payment and Other Benefits (Summary of Stock Option Activity) (Details) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Options outstanding at January 1, 2018 | shares | 8.6 |
Options granted | shares | 0.9 |
Options exercised | shares | (1.8) |
Options forfeited/expired | shares | (0.1) |
Options outstanding at December 31, 2018 | shares | 7.6 |
Options exercisable at December 31, 2018 | shares | 4.3 |
Options vested and expected to vest at December 31, 2018 | shares | 7.6 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |
Weighted-average exercise price, options outstanding at January 1, 2018 | $ / shares | $ 77 |
Weighted-average exercise price, options granted | $ / shares | 173 |
Weighted-average exercise price, options exercised | $ / shares | 57 |
Weighted-average exercise price, options forfeited/expired | $ / shares | 112 |
Weighted-average exercise price, options outstanding at December 31, 2018 | $ / shares | 93 |
Weighted-average exercise price, options exercisable at December 31, 2018 | $ / shares | 72 |
Weighted-average exercise price, options vested and expected to vest at December 31, 2018 | $ / shares | $ 93 |
Weighted-average remaining contractual term, options outstanding at December 31, 2018, in years | 6 years 5 months |
Weighted-average remaining contractual term, options exercisable at December 31, 2018, in years | 5 years 2 months |
Weighted-average remaining contractual term, options vested and expected to vest at December 31, 2018, in years | 6 years 5 months |
Aggregate intrinsic value, options outstanding at December 31, 2018 | $ | $ 726 |
Aggregate intrinsic value, options exercisable at December 31, 2018 | $ | 505 |
Aggregate intrinsic value, options vested and expected to vest at December 31, 2018 | $ | $ 723 |
Share-Based Payment and Other_6
Share-Based Payment and Other Benefits (Summary of Restricted Stock Unit Activity) (Details) - Restricted Stock Units (RSUs) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Outstanding at January 1, 2018 | 4.1 | ||
Granted | 0.9 | ||
Converted | (1.1) | ||
Forfeited | (0.2) | ||
Outstanding at December 31, 2018 | 3.7 | 4.1 | |
Units vested and expected to vest at December 31, 2018 | 3.6 | ||
Weighted-average grant-date fair value, units outstanding at January 1, 2018 | $ 97 | ||
Weighted-average grant-date fair value, granted | 171 | $ 112 | $ 91 |
Weighted-average grant-date fair value, converted | 90 | ||
Weighted-average grant-date fair value, forfeited/expired | 110 | ||
Weighted-average grant-date fair value, units outstanding at December 31, 2018 | 117 | $ 97 | |
Weighted-average grant-date fair value, units vested and expected to vest at December 31, 2018 | $ 116 | ||
Aggregate intrinsic value, units outstanding at December 31, 2018 | $ 702 | ||
Aggregate intrinsic value, units vested and expected to vest at December 31, 2018 | $ 680 |
Share-Based Payment and Other_7
Share-Based Payment and Other Benefits (Summary of Performance Stock Unit Activity) (Details) - Performance stock units - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Outstanding at January 1, 2018 | 0.5 | ||
Granted | 0.1 | ||
Converted | (0.3) | ||
Other | 0.3 | ||
Outstanding at December 31, 2018 | 0.6 | 0.5 | |
RSUs units expected to vest at December 31, 2018 | 0.6 | ||
Weighted-average grant-date fair value, units outstanding at January 1, 2018 | $ 105 | ||
Weighted-average grant-date fair value, granted | 226 | $ 126 | $ 92 |
Weighted-average grant-date fair value, converted | 99 | ||
Weighted-average grant-date fair value, other | 94 | ||
Weighted-average grant-date fair value, units outstanding at December 31, 2018 | 120 | $ 105 | |
Weighted-average grant-date fair value, units expected to vest at December 31, 2018 | $ 119 | ||
Aggregate intrinsic value, units outstanding at December 31, 2018 | $ 119 | ||
Aggregate intrinsic value, units expected to vest at December 31, 2018 | $ 118 |
Share-Based Payment and Other_8
Share-Based Payment and Other Benefits Schedule of Additional Share-Based Payment Information (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense: Options, RSUs and PSUs | $ 196 | $ 176 | $ 148 |
Income tax benefit recognized for equity awards | 41 | 57 | 49 |
Employee Service Share-based Compensation, Tax Benefit from Exercise of Stock Options | 53 | 36 | 31 |
Total intrinsic value of stock options exercised | $ 242 | $ 106 | $ 86 |
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average grant-date fair value of awards granted | $ 171 | $ 112 | $ 91 |
Total intrinsic value of units converted into shares of Class A common stock | $ 194 | $ 131 | $ 122 |
Performance stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average grant-date fair value of awards granted | $ 226 | $ 126 | $ 92 |
Total intrinsic value of units converted into shares of Class A common stock | $ 40 | $ 13 | $ 25 |
Commitments Narrative (Details)
Commitments Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Net present value of minimum lease payments | $ 8 | ||
Future minimum payments operating leases, sponsorship, licensing and other agreements, accrued | 25 | ||
Rental expense for leased office space | 94 | $ 77 | $ 62 |
Lease expense for automobiles, computer equipment and office equipment | $ 20 | $ 22 | $ 19 |
Commitments Future Minimum Paym
Commitments Future Minimum Payments Due Under Non-Cancelable Agreements (Details) $ in Millions | Dec. 31, 2018USD ($) |
Total | |
2,019 | $ 426 |
2,020 | 259 |
2,021 | 175 |
2,022 | 121 |
2,023 | 67 |
Thereafter | 327 |
Total | 1,375 |
Capital Leases | |
2,019 | 4 |
2,020 | 4 |
2,021 | 0 |
2,022 | 0 |
2,023 | 0 |
Thereafter | 0 |
Total | 8 |
Operating Leases | |
2,019 | 72 |
2,020 | 75 |
2,021 | 76 |
2,022 | 68 |
2,023 | 58 |
Thereafter | 327 |
Total | 676 |
Sponsorship, Licensing & Other | |
2,019 | 350 |
2,020 | 180 |
2,021 | 99 |
2,022 | 53 |
2,023 | 9 |
Thereafter | 0 |
Total | $ 691 |
Income Taxes Narrative (Details
Income Taxes Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Apr. 15, 2018 | Jan. 01, 2010 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 |
Tax Credit Carryforward [Line Items] | ||||||
Effective income tax rate | 18.70% | 40.00% | 28.10% | |||
Effective Income Tax Rate Reconciliation,Tax Cuts and Jobs Act of 2017, Amount | $ 75 | $ 873 | ||||
Other foreign tax credit benefits | 90 | |||||
Tax Cuts and Jobs Act of 2017,Incomplete Accounting, ProvisionalIncome Tax Expense (Benefit) | 825 | |||||
Income tax expense | 1,345 | 2,607 | $ 1,587 | |||
Transition Tax | 22 | 629 | 0 | |||
Tax Cuts and Jobs Act of 2017, Incomplete Accounting, Change in Tax Rate, Deferred Tax Asset, Provisional Income Tax Expense (Benefit) | 157 | |||||
Tax Cuts and Jobs Act of 2017,Incomplete Accounting, UndistributedAccumulated Earnings of ForeignSubsidiary, Provisional UnrecognizedDeferred Tax Liability | 36 | |||||
Tax Cuts and Jobs Act, Transition Tax for Accumulated Foreign Earnings, Liability | 687 | |||||
Tax Cuts and Jobs Act, Change in Tax Rate, Deferred Tax Asset, Income Tax Expense | 150 | |||||
Tax Cuts and Jobs Act, Increase in Transition Tax Liability | 36 | |||||
Tax Cuts and Jobs Act, Decrease in Deferred Tax Liability due to Transition Tax | 36 | |||||
Tax Cuts and Jobs Act, Measurement Period Adjustment, Transition Tax, Income Tax Expense (Benefit) | 22 | |||||
Tax Cuts and Jobs Act, Measurement Period Adjustment, Remeasurement of Deferred Tax Assets, Income Tax Expense (Benefit) | $ 7 | |||||
Annual Installment, Transition Tax | 8 years | |||||
Annual Installment Paid, Transition Tax | $ 55 | |||||
Taxes Payable | $ 509 | 577 | ||||
Taxes Payable, Current | 8 | 52 | ||||
Effective income Tax Rate On Taxable Income In Excess Of Base Amount Period In Effect | 10 years | |||||
Impact Of Incentive Grant Received Reducing Income Tax Liability Value | $ 212 | $ 104 | $ 49 | |||
Earning Per Share Diluted Impact Of Incentive Grant Received Reducing Income Tax Liability | $ 0.20 | $ 0.10 | $ 0.04 | |||
Amortization Period for Deferred Charge | 25 years | |||||
Prepaid taxes on intercompany profit transfer | $ 17 | |||||
Non-current prepaid taxes on intercompany profit transfer | $ 0 | 352 | ||||
Deferred Income Tax Charge | $ 369 | |||||
Unremitted Foreign Earnings, Not Permanently Reinvested | 5,800 | |||||
Unremitted Foreign Earnings | 6,700 | |||||
Cumulative Unremitted Foreign Earnings | 7,000 | |||||
Foreign Earnings Repatriated | 3,300 | 267 | $ 116 | |||
Foreign Earnings Expected to be Repatriated | 2,500 | |||||
Earnings permanently reinvested | 900 | |||||
Unrecognized tax benefits that would reduce the effective tax rate | 164 | |||||
Net tax-related interest payable | 8 | 10 | ||||
Accounting Standards Update 2016-16 | ||||||
Tax Credit Carryforward [Line Items] | ||||||
Deferred Tax Assets, Net | $ (183) | $ 186 | ||||
Foregone foreign tax credit benefit on current year repatriations | ||||||
Tax Credit Carryforward [Line Items] | ||||||
Income tax expense | $ 48 |
Income Taxes Schedule of Domest
Income Taxes Schedule of Domestic and Foreign Earnings (Loss) Before Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
United States | $ 3,510 | $ 3,482 | $ 3,736 |
Foreign | 3,694 | 3,040 | 1,910 |
Income before income taxes | $ 7,204 | $ 6,522 | $ 5,646 |
Income Taxes Components of Inco
Income Taxes Components of Income Tax Provision (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current | |||
Federal | $ 649 | $ 1,704 | $ 1,074 |
State and local | 69 | 65 | 36 |
Foreign | 871 | 752 | 497 |
Current | 1,589 | 2,521 | 1,607 |
Deferred | |||
Federal | (228) | 134 | (6) |
State and local | (11) | 1 | (2) |
Foreign | (5) | (49) | (12) |
Deferred | (244) | 86 | (20) |
Income tax expense | $ 1,345 | $ 2,607 | $ 1,587 |
Income Taxes Schedule of Effect
Income Taxes Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Amount | |||
Income before income taxes | $ 7,204 | $ 6,522 | $ 5,646 |
Federal statutory tax | 1,513 | 2,283 | 1,976 |
State tax effect, net of federal benefit | 46 | 43 | 22 |
Foreign tax effect | (92) | (380) | (188) |
European Commission fine | 194 | 0 | 0 |
Impact of foreign tax credits | (110) | (27) | (141) |
Transition Tax | 22 | 629 | 0 |
Remeasurement of deferred taxes | (7) | 157 | 0 |
Windfall benefit | (72) | (43) | 0 |
Other, net | (149) | (55) | (82) |
Income tax expense | $ 1,345 | $ 2,607 | $ 1,587 |
Percent | |||
Federal statutory tax | 21.00% | 35.00% | 35.00% |
State tax effect, net of federal benefit | 0.60% | 0.70% | 0.40% |
Foreign tax effect | (1.30%) | (5.80%) | (3.30%) |
European Commission fine | 2.70% | 0.00% | 0.00% |
Foreign tax credits | (1.50%) | (0.40%) | (2.50%) |
Transition Tax | 0.30% | 9.60% | 0.00% |
Remeasurement of deferred taxes | (0.10%) | 2.40% | 0.00% |
Windfall benefit | (1.00%) | (0.70%) | (0.00%) |
Other, net | (2.00%) | (0.80%) | (1.50%) |
Income tax expense | 18.70% | 40.00% | 28.10% |
Foreign Earnings Repatriated | $ (3,300) | $ (267) | $ (116) |
Other foreign tax credit benefits | $ 90 |
Income Taxes Schedule of Deferr
Income Taxes Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Deferred Tax Assets and Liabilities [Line Items] | |||
Accrued liabilities | $ 297 | $ 158 | |
Compensation and benefits | 210 | 127 | |
State taxes and other credits | 30 | 28 | |
Net operating losses | 104 | 105 | |
Unrealized gain/loss - 2015 Euro Notes | 28 | 48 | |
Recoverable basis of deconsolidated entities | 0 | 35 | |
Intangible assets | 170 | 0 | |
Previously taxed earnings and profits | 7 | 0 | |
Other items | 80 | 83 | |
Less: Valuation allowance | (94) | (91) | |
Total Deferred Tax Assets | 832 | 493 | |
Prepaid expenses and other accruals | 89 | 48 | |
Intangible assets | 125 | 151 | |
Property, plant and equipment | 97 | 83 | |
Previously taxed earnings and profits | 0 | 36 | |
Other items | 18 | 31 | |
Deferred Tax Liabilities, Gross | 329 | 349 | |
Net Deferred Tax Assets | 503 | 144 | |
Deferred tax asset, net | $ 570 | $ 367 | $ 250 |
Accounting Standards Update 2016-16 | |||
Deferred Tax Assets and Liabilities [Line Items] | |||
Deferred tax asset, net | $ 186 |
Income Taxes Reconciliation of
Income Taxes Reconciliation of Beginning and Ending Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Beginning balance | $ 183 | $ 169 | $ 181 |
Current year tax positions | 23 | 21 | 20 |
Prior year tax positions | 5 | 9 | 13 |
Prior year tax positions | (17) | (1) | (28) |
Settlements with tax authorities | (18) | (4) | (2) |
Expired statute of limitations | (12) | (11) | (15) |
Ending balance | $ 164 | $ 183 | $ 169 |
Legal and Regulatory Proceedi_2
Legal and Regulatory Proceedings (Details) € in Millions, $ in Millions, £ in Billions | 1 Months Ended | 3 Months Ended | 12 Months Ended | 24 Months Ended | 80 Months Ended | ||||||||
Jan. 31, 2019EUR (€) | Jul. 31, 2018claimant | Jan. 31, 2017claimant | Oct. 31, 2011plaintiff | Feb. 28, 2011 | Dec. 31, 2018USD ($)merchant | Dec. 31, 2018GBP (£)faxclaimant$ / fax | Dec. 31, 2018USD ($)faxclaimantmerchant$ / fax | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2018USD ($)claimantmerchant | Dec. 31, 2018GBP (£) | Dec. 31, 2018USD ($)merchant | |
Legal And Regulatory | |||||||||||||
Loss Contingency, Unsolicited Advertisements | fax | 381,000 | 381,000 | |||||||||||
Loss Contingency, Damages Sought, Per Claim | $ / fax | 500 | 500 | |||||||||||
Provision for litigation | $ 1,128 | $ 15 | $ 117 | ||||||||||
Accrued litigation | $ 1,591 | 1,591 | 709 | $ 1,591 | $ 1,591 | ||||||||
Restricted cash for litigation settlement | 553 | 553 | 546 | 553 | 553 | ||||||||
Event Involving Visa Parties, Member Banks and Mastercard | |||||||||||||
Legal And Regulatory | |||||||||||||
Percent of settlement Mastercard would pay | 12.00% | ||||||||||||
Event Involving Member Banks and Mastercard | |||||||||||||
Legal And Regulatory | |||||||||||||
Percent of settlement Mastercard would pay | 36.00% | ||||||||||||
Canadian Competition Bureau | |||||||||||||
Legal And Regulatory | |||||||||||||
Amount of damages sought (that exceeds) | 5,000 | ||||||||||||
U.S. Merchant Lawsuit Settlement | |||||||||||||
Legal And Regulatory | |||||||||||||
Accrued litigation | $ 915 | $ 915 | $ 708 | $ 915 | $ 915 | ||||||||
U.S. Merchant Litigation - Class Litigation | |||||||||||||
Legal And Regulatory | |||||||||||||
Approximate percentage of merchants that opted out of settlement | 25.00% | 25.00% | 25.00% | 25.00% | |||||||||
Minimum | U.S. Merchant Litigation - Class Litigation | |||||||||||||
Legal And Regulatory | |||||||||||||
Legal proceeding complaints from merchants that have opted out of settlement | merchant | 30 | 30 | 30 | 30 | |||||||||
U.S. Merchant Lawsuit Settlement | |||||||||||||
Legal And Regulatory | |||||||||||||
Provision for litigation | $ 237 | ||||||||||||
European Commission | |||||||||||||
Legal And Regulatory | |||||||||||||
Provision for litigation | $ 654 | ||||||||||||
Proposed U.K. Interchange Collective Action | |||||||||||||
Legal And Regulatory | |||||||||||||
Amount of damages sought (that exceeds) | £ 14 | 18,000 | |||||||||||
U.K. Merchant Lawsuit Settlement | |||||||||||||
Legal And Regulatory | |||||||||||||
Amount of damages sought (that exceeds) | £ 3 | $ 4,000 | |||||||||||
Loss Contingency, Damages Resolved, Value | £ 2 | $ 3,000 | |||||||||||
U.K. Merchant Lawsuit Settlement and Pan-European Merchant Litigation [Domain] | |||||||||||||
Legal And Regulatory | |||||||||||||
Provision for litigation | $ 237 | $ 117 | |||||||||||
U.K. Merchant claimants | |||||||||||||
Legal And Regulatory | |||||||||||||
Number of claimants in case | claimant | 10 | ||||||||||||
Number of plaintiffs in case | claimant | 10 | ||||||||||||
ATM Operators Complaint | |||||||||||||
Legal And Regulatory | |||||||||||||
Number of claimants in case | plaintiff | 13 | ||||||||||||
Number of plaintiffs in case | plaintiff | 13 | ||||||||||||
Appealing judgment | U.K. Merchant claimants | |||||||||||||
Legal And Regulatory | |||||||||||||
Loss Contingency, Claims Settled, Number | claimant | 3 | ||||||||||||
Judicial Ruling | 2016 U.K. Merchant Claimants | Unfavorable Regulatory Action | |||||||||||||
Legal And Regulatory | |||||||||||||
Loss Contingency, Claims Settled, Number | claimant | 1 | 1 | |||||||||||
Judicial Ruling | 2017 U.K. Merchant Claimants | |||||||||||||
Legal And Regulatory | |||||||||||||
Loss Contingency, Claims Settled, Number | claimant | 3 | ||||||||||||
Judicial Ruling | 2017 U.K. Merchant Claimants | Unfavorable Regulatory Action | |||||||||||||
Legal And Regulatory | |||||||||||||
Loss Contingency, Claims Settled, Number | claimant | 2 | ||||||||||||
Subsequent Event | European Commission | |||||||||||||
Legal And Regulatory | |||||||||||||
Provision for litigation | € | € 571 |
Settlement and Other Risk Man_3
Settlement and Other Risk Management Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Settlement and Other Risk Management [Abstract] | ||
Travelers cheques outstanding, notional value | $ 377 | $ 395 |
Travelers cheques covered by collateral arrangements | $ 297 | $ 313 |
Settlement and Other Risk Man_4
Settlement and Other Risk Management Estimated Settlement Exposure and Portion of Uncollateralized Settlement Exposure for MasterCard-Branded Transactions (Details) - Guarantee Obligations - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Risks Inherent in Servicing Assets and Servicing Liabilities [Line Items] | ||
Gross settlement exposure | $ 49,666 | $ 47,002 |
Collateral held for settlement exposure | (4,711) | (4,360) |
Net uncollateralized settlement exposure | $ 44,955 | $ 42,642 |
Foreign Exchange Risk Managem_3
Foreign Exchange Risk Management Classification of Outstanding Forward Contracts (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts Receivable | ||
Foreign Exchange Risk Management | ||
Forward contracts to purchase and sell foreign currency - Balance sheet location - Accounts receivable | $ 0 | $ 6 |
Prepaid Expenses and Other Current Assets | ||
Foreign Exchange Risk Management | ||
Forward contracts to purchase and sell foreign currency - Balance sheet location - Accounts receivable | 35 | 0 |
Other Current Liabilities | ||
Foreign Exchange Risk Management | ||
Forward contracts to purchase and sell foreign currency - Balance sheet location - Other current liabilities | (6) | (30) |
Commitments to purchase foreign currency | Foreign Exchange Forward | ||
Foreign Exchange Risk Management | ||
Commitments to purchase/sell foreign currency, Notional | 34 | 27 |
Commitments to purchase/sell foreign currency, Estimated Fair Value | (1) | 0 |
Commitments to sell foreign currency | Foreign Exchange Forward | ||
Foreign Exchange Risk Management | ||
Commitments to purchase/sell foreign currency, Notional | 1,066 | 968 |
Commitments to purchase/sell foreign currency, Estimated Fair Value | 26 | (26) |
Commitments to sell foreign currency | Foreign Exchange Option | ||
Foreign Exchange Risk Management | ||
Commitments to purchase/sell foreign currency, Notional | 25 | 27 |
Commitments to purchase/sell foreign currency, Estimated Fair Value | $ 4 | $ 2 |
Foreign Exchange Risk Managem_4
Foreign Exchange Risk Management Foreign Exchange Risk Management (Details) € in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015EUR (€) | |
Foreign Exchange Risk Management | ||||
Terms of the foreign currency forward contracts | 18 months | |||
Net foreign currency transaction pre-tax loss in accumulated other comprehensive income | $ 120 | |||
Foreign Currency Derivative Contracts | ||||
Foreign Exchange Risk Management | ||||
Approximate effect of 10% adverse change in foreign currency rates on fair value loss | 113 | |||
Foreign Currency Derivative Contracts | General and Administrative | ||||
Foreign Exchange Risk Management | ||||
Gain (loss) for contracts to purchase and sell foreign currency | $ 53 | $ (75) | $ (6) | |
Net Investment Hedging | ||||
Foreign Exchange Risk Management | ||||
Euro-denominated debt designated as hedge of net investment in European foreign operations denominated in euros | € | € 1,650 |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule of Property, Plant and Equipment, by Geographical Segment | |||
Property, Plant and Equipment, Net | $ 921 | $ 829 | $ 733 |
United States | |||
Schedule of Property, Plant and Equipment, by Geographical Segment | |||
Property, Plant and Equipment, Net | 613 | 572 | 504 |
Other countries | |||
Schedule of Property, Plant and Equipment, by Geographical Segment | |||
Property, Plant and Equipment, Net | $ 308 | $ 257 | $ 229 |
Segment Reporting (Narrative) (
Segment Reporting (Narrative) (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting [Abstract] | |||
Percentage of revenue generated in the U.S. | 33.00% | 35.00% | 38.00% |
SUMMARY OF QUARTERLY DATA (Un_3
SUMMARY OF QUARTERLY DATA (Unaudited) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Financial Data [Abstract] | |||||||||||
Net revenue | $ 3,807 | $ 3,898 | $ 3,665 | $ 3,580 | $ 3,312 | $ 3,398 | $ 3,053 | $ 2,734 | $ 14,950 | $ 12,497 | $ 10,776 |
Operating income | 1,234 | 2,287 | 1,936 | 1,825 | 1,522 | 1,941 | 1,653 | 1,506 | 7,282 | 6,622 | 5,761 |
Net income | $ 899 | $ 1,899 | $ 1,569 | $ 1,492 | $ 227 | $ 1,430 | $ 1,177 | $ 1,081 | $ 5,859 | $ 3,915 | $ 4,059 |
Basic Earnings per Share | $ 0.87 | $ 1.83 | $ 1.50 | $ 1.42 | $ 0.21 | $ 1.34 | $ 1.10 | $ 1 | $ 5.63 | $ 3.67 | $ 3.70 |
Basic weighted-average shares outstanding | 1,032 | 1,037 | 1,043 | 1,051 | 1,057 | 1,063 | 1,070 | 1,078 | 1,041 | 1,067 | 1,098 |
Diluted earnings per share | $ 0.87 | $ 1.82 | $ 1.50 | $ 1.41 | $ 0.21 | $ 1.34 | $ 1.10 | $ 1 | $ 5.60 | $ 3.65 | $ 3.69 |
Diluted weighted-average shares outstanding | 1,038 | 1,043 | 1,049 | 1,057 | 1,063 | 1,068 | 1,075 | 1,082 | 1,047 | 1,072 | 1,101 |