PART II

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Consolidated Balance Sheet

December 31,
2020 2019
(in millions, except per share data)
Assets
Current assets:
Cash and cash equivalents $ 10,113 $ 6,988
Restricted cash for litigation settlement 586 584
Investments 483 688
Accounts receivable 2,646 2,514
Settlement due from customers 1,706 2,995
Restricted security deposits held for customers 1,696 1,370
Prepaid expenses and other current assets 1,883 1,763
Total current assets 19,113 16,902
Property, equipment and right-of-use assets, net 1,902 1,828
Deferred income taxes 491 543
Goodwill 4,960 4,021
Other intangible assets, net 1,753 1,417
Other assets 5,365 4,525
Total Assets $ 33,584 $ 29,236
Liabilities, Redeemable Non-controlling Interests and Equity
Current liabilities:
Accounts payable $ 527 $ 489
Settlement due to customers 1,475 2,714
Restricted security deposits held for customers 1,696 1,370
Accrued litigation 842 914
Accrued expenses 5,430 5,489
Current portion of long-term debt 649 —
Other current liabilities 1,228 928
Total current liabilities 11,847 11,904
Long-term debt 12,023 8,527
Deferred income taxes 86 85
Other liabilities 3,111 2,729
Total Liabilities 27,067 23,245
Commitments and Contingencies
Redeemable Non-controlling Interests 29 74
Stockholders’ Equity
Class A common stock, $0.0001 par value; authorized 3,000 shares, 1,396 and 1,391 shares
issued and 987 and 996 shares outstanding, respectively — —
Class B common stock, $0.0001 par value; authorized 1,200 shares, 8 and 11 shares issued
and outstanding, respectively — —
Additional paid-in-capital 4,982 4,787
Class A treasury stock, at cost, 409 and 395 shares, respectively (36,658) (32,205)
Retained earnings 38,747 33,984
Accumulated other comprehensive income (loss) (680) (673)
Mastercard Incorporated Stockholders' Equity 6,391 5,893
Non-controlling interests 97 24
Total Equity 6,488 5,917
Total Liabilities, Redeemable Non-controlling Interests and Equity $ 33,584 $ 29,236

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

62 MASTERCARD 2020 FORM 10-K

 PART II
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Consolidated Statement of Cash Flows

For the Years Ended December 31,
2020 2019 2018
(in millions)
Operating Activities
Net income $ 6,411 $ 8,118 $ 5,859
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of customer and merchant incentives 1,072 1,141 1,235
Depreciation and amortization 580 522 459
(Gains) losses on equity investments, net (30) (167) —
Share-based compensation 254 250 196
Deferred income taxes 73 (7) (244)
Other 14 24 31
Changes in operating assets and liabilities:
Accounts receivable (86) (246) (317)
Income taxes receivable (2) (202) (120)
Settlement due from customers 1,288 (444) (1,078)
Prepaid expenses (1,552) (1,661) (1,769)
Accrued litigation and legal settlements (73) (662) 869
Restricted security deposits held for customers 326 290 (6)
Accounts payable 26 (42) 101
Settlement due to customers (1,242) 477 849
Accrued expenses (114) 657 439
Long-term taxes payable (37) 2 (20)
Net change in other assets and liabilities 316 133 (261)
Net cash provided by operating activities 7,224 8,183 6,223
Investing Activities
Purchases of investment securities available-for-sale (220) (643) (1,300)
Purchases of investments held-to-maturity (198) (215) (509)
Proceeds from sales of investment securities available-for-sale 361 1,098 604
Proceeds from maturities of investment securities available-for-sale 140 376 379
Proceeds from maturities of investments held-to-maturity 121 383 929
Purchases of property and equipment (339) (422) (330)
Capitalized software (369) (306) (174)
Purchases of equity investments (214) (467) (91)
Acquisition of businesses, net of cash acquired (989) (1,440) —
Settlement of interest rate derivative contracts (175) — —
Other investing activities 3 (4) (14)
Net cash used in investing activities (1,879) (1,640) (506)
Financing Activities
Purchases of treasury stock (4,473) (6,497) (4,933)
Dividends paid (1,605) (1,345) (1,044)
Proceeds from debt, net 3,959 2,724 991
Payment of debt — (500) —
Acquisition of redeemable non-controlling interests (49) — —
Contingent consideration paid — (199) —
Tax withholdings related to share-based payments (150) (161) (80)
Cash proceeds from exercise of stock options 97 126 104
Other financing activities 69 (15) (4)
Net cash used in financing activities (2,152) (5,867) (4,966)
Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents 257 (44) (6)
Net increase in cash, cash equivalents, restricted cash and restricted cash equivalents 3,450 632 745
Cash, cash equivalents, restricted cash and restricted cash equivalents - beginning of period 8,969 8,337 7,592
Cash, cash equivalents, restricted cash and restricted cash equivalents - end of period $ 12,419 $ 8,969 $ 8,337

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

MASTERCARD 2020 FORM 10-K 65