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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
Or 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission file number: 001-32877
ma-20220331_g1.jpg
Mastercard Incorporated
(Exact name of registrant as specified in its charter)
Delaware13-4172551
(State or other jurisdiction of incorporation or organization)(IRS Employer Identification Number)
2000 Purchase Street10577
Purchase,NY(Zip Code)
(Address of principal executive offices)
(914) 249-2000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange of which registered
Class A Common Stock, par value $0.0001 per share
MA
New York Stock Exchange
1.1% Notes due 2022
MA22
New York Stock Exchange
2.1% Notes due 2027
MA27
New York Stock Exchange
1.0% Notes due 2029
MA29A
New York Stock Exchange
2.5% Notes due 2030
MA30
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes
No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files)
Yes


No


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check One):
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act)
Yes
No
As of April 25, 2022, there were 964,920,839 shares outstanding of the registrant’s Class A common stock, par value $0.0001 per share; and 7,723,884 shares outstanding of the registrant’s Class B common stock, par value $0.0001 per share.



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MASTERCARD INCORPORATED FORM 10-Q
TABLE OF CONTENTS
PART I
PART II
-

2 MASTERCARD MARCH 31, 2022 FORM 10-Q


In this Report on Form 10-Q (“Report”), references to the “Company,” “Mastercard,” “we,” “us” or “our” refer to the business conducted by Mastercard Incorporated and its consolidated subsidiaries, including our operating subsidiary, Mastercard International Incorporated, and to the Mastercard brand.
Forward-Looking Statements
This Report contains forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts may be forward-looking statements. When used in this Report, the words “believe”, “expect”, “could”, “may”, “would”, “will”, “trend” and similar words are intended to identify forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements that relate to the Company’s future prospects, developments and business strategies.
Many factors and uncertainties relating to our operations and business environment, all of which are difficult to predict and many of which are outside of our control, influence whether any forward-looking statements can or will be achieved. Any one of those factors could cause our actual results to differ materially from those expressed or implied in writing in any forward-looking statements made by Mastercard or on its behalf, including, but not limited to, the following factors:
regulation directly related to the payments industry (including regulatory, legislative and litigation activity with respect to interchange rates and surcharging)
the impact of preferential or protective government actions
regulation of privacy, data, security and the digital economy
regulation that directly or indirectly applies to us based on our participation in the global payments industry (including anti-money laundering, counter financing of terrorism, economic sanctions and anti-corruption, account-based payments systems, and issuer and acquirer practice regulation)
the impact of changes in tax laws, as well as regulations and interpretations of such laws or challenges to our tax positions
potential or incurred liability and limitations on business related to any litigation or litigation settlements
the impact of the global COVID-19 pandemic and measures taken in response
the impact of competition in the global payments industry (including disintermediation and pricing pressure)
the challenges relating to rapid technological developments and changes
the challenges relating to operating a real-time account-based payments system and to working with new customers and end users
the impact of information security incidents, account data breaches or service disruptions
issues related to our relationships with our stakeholders (including loss of substantial business from significant customers, competitor relationships with our customers, consolidation amongst our customers, merchants’ continued focus on acceptance costs and unique risks from our work with governments)
exposure to loss or illiquidity due to our role as guarantor and other contractual obligations
the impact of global economic, political, financial and societal events and conditions, including adverse currency fluctuations and foreign exchange controls
events and resulting actions related to the Russian invasion of Ukraine
reputational impact, including impact related to brand perception and lack of visibility of our brands in products and services
the inability to attract, hire and retain a highly qualified and diverse workforce, or maintain our corporate culture
issues related to acquisition integration, strategic investments and entry into new businesses
issues related to our Class A common stock and corporate governance structure
Please see a complete discussion of these risk factors in Part I, Item 1A - Risk Factors of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 and in Part II, Item 1A - Risk Factors of this Report. We caution you that the important factors referenced above may not contain all of the factors that are important to you. Our forward-looking statements speak only as of the date of this Report or as of the date they are made, and we undertake no obligation to update our forward-looking statements.

MASTERCARD MARCH 31, 2022 FORM 10-Q 3


PART I



PART I
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Item 1. Consolidated financial statements (unaudited)
Mastercard Incorporated
Index to consolidated financial statements (unaudited)
Page
Consolidated Statement of Operations — Three Months Ended March 31, 2022 and 2021
Consolidated Balance Sheet — March 31, 2022 and December 31, 2021
Consolidated Statement of Changes in Equity Three Months Ended March 31, 2022 and 2021
Consolidated Statement of Cash Flows — Three Months Ended March 31, 2022 and 2021

MASTERCARD MARCH 31, 2022 FORM 10-Q 5


PART I
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Statement of Operations (Unaudited)
 Three Months Ended March 31,
 20222021
 (in millions, except per share data)
Net Revenue$5,167 $4,155 
Operating Expenses:
General and administrative1,844 1,676 
Advertising and marketing181 119 
Depreciation and amortization192 163 
Total operating expenses2,217 1,958 
Operating income2,950 2,197 
Other Income (Expense):
Investment income5 1 
Gains (losses) on equity investments, net(76)94 
Interest expense(110)(107)
Other income (expense), net4 5 
Total other income (expense)(177)(7)
Income before income taxes2,773 2,190 
Income tax expense142 362 
Net Income$2,631 $1,828 
Basic Earnings per Share$2.69 $1.84 
Basic weighted-average shares outstanding977 994 
Diluted Earnings per Share$2.68 $1.83 
Diluted weighted-average shares outstanding981 998 

The accompanying notes are an integral part of these consolidated financial statements.

6 MASTERCARD MARCH 31, 2022 FORM 10-Q


PART I
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Statement of Comprehensive Income (Unaudited)
 Three Months Ended March 31,
 20222021
 (in millions)
Net Income$2,631 $1,828 
Other comprehensive income (loss):
Foreign currency translation adjustments(64)(198)
Income tax effect12 33 
Foreign currency translation adjustments, net of income tax effect(52)(165)
Translation adjustments on net investment hedges86 133 
Income tax effect(19)(30)
Translation adjustments on net investment hedges, net of income tax effect67 103 
Cash flow hedges1 3 
Income tax effect (1)
Reclassification adjustments for cash flow hedges(5)1 
Income tax effect1  
Cash flow hedges, net of income tax effect(3)3 
Investment securities available-for-sale
(2)1 
Income tax effect1  
Investment securities available-for-sale, net of income tax effect(1)1 
Other comprehensive income (loss), net of tax11 (58)
Comprehensive Income$2,642 $1,770 

The accompanying notes are an integral part of these consolidated financial statements.


MASTERCARD MARCH 31, 2022 FORM 10-Q 7


PART I
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Balance Sheet (Unaudited)
March 31, 2022December 31, 2021
 (in millions, except per share data)
Assets
Current assets:
Cash and cash equivalents$6,879 $7,421 
Restricted cash for litigation settlement585 586 
Investments449 473 
Accounts receivable2,889 3,006 
Settlement assets1,101 1,319 
Restricted security deposits held for customers1,730 1,873 
Prepaid expenses and other current assets2,320 2,271 
Total current assets15,953 16,949 
Property, equipment and right-of-use assets, net of accumulated depreciation and amortization
of $1,679 and $1,614, respectively
1,957 1,907 
Deferred income taxes795 486 
Goodwill7,625 7,662 
Other intangible assets, net of accumulated amortization of $1,819 and $1,755, respectively
3,675 3,671 
Other assets7,158 6,994 
Total Assets$37,163 $37,669 
Liabilities, Redeemable Non-controlling Interests and Equity
Current liabilities:
Accounts payable$666 $738 
Settlement obligations547 913 
Restricted security deposits held for customers1,730 1,873 
Accrued litigation797 840 
Accrued expenses5,954 6,642 
Current portion of long-term debt778 792 
Other current liabilities1,456 1,364 
Total current liabilities11,928 13,162 
Long-term debt13,868 13,109 
Deferred income taxes386 395 
Other liabilities3,851 3,591 
Total Liabilities30,033 30,257 
Commitments and Contingencies
Redeemable Non-controlling Interests28 29 
Stockholders’ Equity
Class A common stock, $0.0001 par value; authorized 3,000 shares, 1,398 and 1,397 shares issued and 967 and 972 shares outstanding, respectively
  
Class B common stock, $0.0001 par value; authorized 1,200 shares, 8 shares issued and outstanding
  
Additional paid-in-capital5,026 5,061 
Class A treasury stock, at cost, 432 and 425 shares, respectively
(44,994)(42,588)
Retained earnings47,800 45,648 
Accumulated other comprehensive income (loss)(798)(809)
Mastercard Incorporated Stockholders' Equity7,034 7,312 
Non-controlling interests68 71 
Total Equity7,102 7,383 
Total Liabilities, Redeemable Non-controlling Interests and Equity$37,163 $37,669 

The accompanying notes are an integral part of these consolidated financial statements.

8 MASTERCARD MARCH 31, 2022 FORM 10-Q


PART I
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Statement of Changes in Equity (Unaudited)
Three Months Ended March 31, 2022
Stockholders’ Equity
  
Common Stock
Additional
Paid-In
Capital
Class A
Treasury
Stock
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Mastercard Incorporated Stockholders' EquityNon-
Controlling
Interests
Total
Equity
 Class AClass B
 (in millions)
Balance at December 31, 2021$ $ $5,061 $(42,588)$45,648 $(809)$7,312 $71 $7,383 
Net income— — — — 2,631 — 2,631 — 2,631 
Activity related to non-controlling interests— — — — — — — (3)(3)
Redeemable non-controlling interest adjustments — — — — (2)— (2)— (2)
Other comprehensive income (loss)— — — — — 11 11 — 11 
Dividends— — — — (477)— (477)— (477)
Purchases of treasury stock— — — (2,411)— — (2,411)— (2,411)
Share-based payments— — (35)5 — — (30)— (30)
Balance at March 31, 2022$ $ $5,026 $(44,994)$47,800 $(798)$7,034 $68 $7,102 
Three Months Ended March 31, 2021
Stockholders’ Equity
  
Common Stock
Additional
Paid-In
Capital
Class A
Treasury
Stock
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Mastercard Incorporated Stockholders' EquityNon-
Controlling
Interests
Total
Equity
 Class AClass B
 (in millions)
Balance at December 31, 2020$ $ $4,982 $(36,658)$38,747 $(680)$6,391 $97 $6,488 
Net income— — — — 1,828 — 1,828 — 1,828 
Activity related to non-controlling interests— — — — — — — 1 1 
Redeemable non-controlling interest adjustments— — — — (1)— (1)— (1)
Other comprehensive income (loss)— — — — — (58)(58)— (58)
Dividends— — — — (434)— (434)— (434)
Purchases of treasury stock— — — (1,370)— — (1,370)— (1,370)
Share-based payments— — (33)4 — — (29)— (29)
Balance at March 31, 2021$ $ $4,949 $(38,024)$40,140 $(738)$6,327 $98 $6,425 

The accompanying notes are an integral part of these consolidated financial statements.

MASTERCARD MARCH 31, 2022 FORM 10-Q 9


PART I
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Statement of Cash Flows (Unaudited)
 Three Months Ended March 31,
 20222021
 (in millions)
Operating Activities
Net income$2,631 $1,828 
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of customer and merchant incentives430 338 
Depreciation and amortization192 163 
(Gains) losses on equity investments, net76 (94)
Share-based compensation74 65 
Deferred income taxes(320)33 
Other5 11 
Changes in operating assets and liabilities:
Accounts receivable134 (70)
Settlement assets218 28 
Prepaid expenses(441)(562)
Accrued litigation and legal settlements(43)(2)
Restricted security deposits held for customers(144)63 
Accounts payable(56)(15)
Settlement obligations(366)(178)
Accrued expenses(746)(163)
Net change in other assets and liabilities138 18 
Net cash provided by operating activities1,782 1,463 
Investing Activities
Purchases of investment securities available-for-sale(58)(155)
Purchases of investments held-to-maturity(37)(38)
Proceeds from sales of investment securities available-for-sale8 23 
Proceeds from maturities of investment securities available-for-sale70 72 
Proceeds from maturities of investments held-to-maturity43 79 
Purchases of property and equipment(146)(65)
Capitalized software(148)(79)
Purchases of equity investments(24)(42)
Acquisition of businesses, net of cash acquired (3,364)
Other investing activities5 9 
Net cash used in investing activities(287)(3,560)
Financing Activities
Purchases of treasury stock(2,408)(1,356)
Dividends paid(479)(439)
Proceeds from debt, net843 1,282 
Tax withholdings related to share-based payments(132)(121)
Cash proceeds from exercise of stock options28 23 
Other financing activities(6)5 
Net cash used in financing activities(2,154)(606)
Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents(28)(101)
Net decrease in cash, cash equivalents, restricted cash and restricted cash equivalents(687)(2,804)
Cash, cash equivalents, restricted cash and restricted cash equivalents - beginning of period9,902 12,419 
Cash, cash equivalents, restricted cash and restricted cash equivalents - end of period$9,215 $9,615 

The accompanying notes are an integral part of these consolidated financial statements.

10 MASTERCARD MARCH 31, 2022 FORM 10-Q


PART I
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Notes to consolidated financial statements (unaudited)
Note 1. 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.
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 marketable equity method or measurement alternative method investments and recorded in other assets on the consolidated balance sheet. At March 31, 2022 and December 31, 2021, there were no significant VIEs which required consolidation and the investments were not considered material to the consolidated financial statements. The Company consolidates acquisitions as of the date on which the Company has obtained a controlling financial interest. Intercompany transactions and balances have been eliminated in consolidation. The Company corrected prior period classifications of certain line items within investing activities on the consolidated statement of cash flows with no impact on total net cash used in investing activities. The Company follows accounting principles generally accepted in the United States of America (“GAAP”).
The balance sheet as of December 31, 2021 was derived from the audited consolidated financial statements as of December 31, 2021. The consolidated financial statements for the three months ended March 31, 2022 and 2021 and as of March 31, 2022 are unaudited, and in the opinion of management, include all normal recurring adjustments that are necessary to present fairly the results for interim periods. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the full year.
The accompanying unaudited consolidated financial statements are presented in accordance with the U.S. Securities and Exchange Commission (“SEC”) requirements for Quarterly Reports on Form 10-Q. Reference should be made to Mastercard’s Annual Report on Form 10-K for the year ended December 31, 2021 for additional disclosures, including a summary of the Company’s significant accounting policies.
Key Developments
Beginning in February 2022, in response to the Russian invasion of Ukraine, the United States and other governments imposed sanctions and other restrictive measures on certain Russian-related entities and individuals and, in March 2022, the Company suspended business operations in Russia. The financial impacts related to these actions were not material to the Company’s overall financial results for the current period.
Note 2. Acquisitions
During the three months ended March 31, 2022, the Company did not acquire any businesses. In 2021, the Company acquired several businesses in separate transactions for total consideration of $4.7 billion. As of March 31, 2022, the Company had finalized the purchase accounting for $3.6 billion of the businesses acquired and is evaluating and finalizing the purchase accounting for the remainder of businesses acquired during 2021. For the preliminary estimated and final fair values of the purchase price allocations, as of the acquisition dates, refer to Note 2 (Acquisitions) to the consolidated financial statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.
Pending Acquisition
As of March 31, 2022, Mastercard has entered into a definitive agreement to acquire Dynamic Yield LTD. This acquisition subsequently closed in April 2022. The Company will begin consolidating the acquisition as of the date acquired.

MASTERCARD MARCH 31, 2022 FORM 10-Q 11


PART I
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 3. Revenue
The Company’s disaggregated net revenue by source and geographic region were as follows:
Three Months Ended March 31,
20222021
(in millions)
Revenue by source:
Domestic assessments$2,134 $1,798 
Cross-border volume fees1,395 932 
Transaction processing2,912 2,351 
Other revenues1,584 1,347 
Gross revenue8,025 6,428 
Rebates and incentives (contra-revenue)(2,858)(2,273)
Net revenue$5,167 $4,155 
Net revenue by geographic region:
North American Markets$1,703 $1,491 
International Markets3,385 2,618 
Other 1
79 46 
Net revenue$5,167 $4,155 
1    Includes revenues managed by corporate functions.
The Company’s customers are generally billed weekly, however, the frequency is dependent upon the nature of the performance obligation and the underlying contractual terms. The Company does not typically offer extended payment terms to customers. The following table sets forth the location of the amounts recognized on the consolidated balance sheet from contracts with customers:
March 31,
2022
December 31,
2021
(in millions)
Receivables from contracts with customers
Accounts receivable
$2,680 $2,829 
Contract assets
Prepaid expenses and other current assets148 134 
Other assets530 487 
Deferred revenue 1
Other current liabilities586 482 
Other liabilities203 180 
1    Revenue recognized from performance obligations satisfied during the three months ended March 31, 2022 and 2021 was $335 million and $180 million, respectively.

12 MASTERCARD MARCH 31, 2022 FORM 10-Q


PART I
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 4. Earnings Per Share
The components of basic and diluted earnings per share (“EPS”) for common shares were as follows:
Three Months Ended March 31,
20222021
(in millions, except per share data)
Numerator
Net income$2,631 $1,828 
Denominator
Basic weighted-average shares outstanding977 994 
Dilutive stock options and stock units4 4 
Diluted weighted-average shares outstanding 1
981 998 
Earnings per Share
Basic$2.69 $1.84 
Diluted$2.68 $1.83 
1    For the periods presented, the calculation of diluted EPS excluded a minimal amount of anti-dilutive share-based payment awards.
Note 5. 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.
March 31,
2022
December 31,
2021
(in millions)
Cash and cash equivalents$6,879 $7,421 
Restricted cash and restricted cash equivalents
Restricted cash for litigation settlement585 586 
Restricted security deposits held for customers1,730 1,873 
Prepaid expenses and other current assets21 22 
Cash, cash equivalents, restricted cash and restricted cash equivalents$9,215 $9,902 
Note 6. Investments
The Company’s investments on the consolidated balance sheet include both available-for-sale and held-to-maturity debt securities (see Investments section below). The Company classifies its investments in equity securities of publicly traded and privately held companies within other assets on the consolidated balance sheet (see Equity Investments section below).
Investments
Investments on the consolidated balance sheet consisted of the following:
March 31,
2022
December 31,
2021
(in millions)
Available-for-sale securities 1
$289 $314 
Held-to-maturity securities 2
160 159 
Total investments $449 $473 
1See Available-for-Sale Securities section below for further detail.
2The cost of these securities approximates fair value.

MASTERCARD MARCH 31, 2022 FORM 10-Q 13


PART I
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Available-for-Sale Securities
The major classes of the Company’s available-for-sale investment securities and their respective amortized cost basis and fair values were as follows:
 March 31, 2022December 31, 2021
 Amortized
Cost
Gross
Unrealized
Gain
Gross
Unrealized
Loss
Fair
Value
Amortized
Cost
Gross
Unrealized
Gain
Gross
Unrealized
Loss
Fair
Value
(in millions)
Municipal securities$1 $ $ $1 $2 $ $ $2 
Government and agency securities85   85 98   98 
Corporate securities205  (2)203 214   214 
Total$291 $ $(2)$289 $314 $ $ $314 
The Company’s corporate and municipal available-for-sale investment securities held at March 31, 2022 and December 31, 2021 primarily carried a credit rating of A- or better. Corporate securities are comprised of commercial paper and corporate bonds. Municipal securities are comprised of state 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 which are denominated in the national currency of the issuing country. Unrealized gains and losses are recorded as a separate component of other comprehensive income (loss) on the consolidated statement of comprehensive income.
The maturity distribution based on the contractual terms of the Company’s available-for-sale investment securities at March 31, 2022 was as follows:
 
 Amortized CostFair Value
 (in millions)
Due within 1 year$134 $134 
Due after 1 year through 5 years157 155 
Total$291 $289 
Investment income on the consolidated statement of operations primarily consists of interest income generated from cash, cash equivalents, time deposits and available-for-sale investment securities, as well as realized gains and losses on the Company’s investment securities. The realized gains and losses from the sales of available-for-sale securities for the three months ended March 31, 2022 and 2021 were not material.
Equity Investments
Included in other assets on the consolidated balance sheet are equity investments with readily determinable fair values (“Marketable securities”) and equity investments without readily determinable fair values (“Nonmarketable securities”). Marketable securities are equity interests in publicly traded companies and are measured using unadjusted quoted prices in their respective active markets. Nonmarketable securities that do not qualify for equity method accounting are measured at cost, less any impairment and adjusted for changes resulting from observable price changes in orderly transactions for the identical or similar investments of the same issuer (“Measurement alternative”).
The following table is a summary of the activity related to the Company’s equity investments:
 Balance at December 31, 2021PurchasesSales
Changes in Fair Value 1
Other 2
Balance at March 31, 2022
(in millions)
Marketable securities $627 $ $ $(162)$(5)$460 
Nonmarketable securities1,207 24  86 (5)1,312 
Total equity investments $1,834 $24 $ $(76)$(10)$1,772 
1Recorded in gains (losses) on equity investments, net on the consolidated statement of operations.
2Includes translational impact of currency.


14 MASTERCARD MARCH 31, 2022 FORM 10-Q


PART I
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table sets forth the components of the Company’s Nonmarketable securities:
March 31,
2022
December 31,
2021
(in millions)
Measurement alternative
$1,038 $952 
Equity method
274 255 
Total Nonmarketable securities$1,312 $1,207 
The following table summarizes the total carrying value of the Company’s Measurement alternative investments, including cumulative unrealized gains and losses through March 31, 2022:
March 31,
2022
(in millions)
Initial cost basis
$457 
Cumulative adjustments:
Upward adjustments594 
Downward adjustments (including impairment)(13)
Carrying amount, end of period$1,038 
The following table summarizes the unrealized gains and losses included in the carrying value of the Company’s Measurement alternative investments and Marketable securities for the three months ended March 31, 2022 and 2021:
Three Months Ended March 31,
20222021
(in millions)
Measurement alternative investments:
Upward adjustments$86 $41 
Downward adjustments (including impairment)  
Marketable securities:
Unrealized gains/(losses), net(162)54 
Note 7. Fair Value Measurements
The Company classifies its fair value measurements of financial instruments into a three-level hierarchy (the “Valuation Hierarchy”). Financial instruments are categorized for fair value measurement purposes as recurring or non-recurring in nature.

MASTERCARD MARCH 31, 2022 FORM 10-Q 15


PART I
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Financial Instruments - Recurring Measurements
The distribution of the Company’s financial instruments measured at fair value on a recurring basis within the Valuation Hierarchy were as follows:
 March 31, 2022December 31, 2021
 Quoted Prices
in Active
Markets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
TotalQuoted Prices
in Active
Markets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total
(in millions)
Assets
Investment securities available-for-sale 1:
Municipal securities$ $1 $ $1 $ $2 $ $2 
Government and agency securities33 52  85 35 63  98 
Corporate securities 203  203  214  214 
Derivative instruments 2:
Foreign exchange contracts 43  43  8  8 
Interest rate contracts     6  6 
Marketable securities 3:
Equity securities460   460 627   627 
Deferred compensation plan 4:
Deferred compensation assets77   77 89   89 
Liabilities
Derivative instruments 2:
Foreign exchange contracts$ $7 $ $7 $ $15 $ $15 
Interest rate contracts  53  53  8  8 
Deferred compensation plan 5:
Deferred compensation liabilities84   84 89   89 
1