Stock Analysis on Net
Stock Analysis on Net

Mastercard Inc. (NYSE:MA)

Analysis of Operating Leases

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Present Value of Future Operating Lease Payments (before Adoption of FASB Topic 842)

Mastercard Inc., future operating lease payments (before adoption of FASB Topic 842)

US$ in millions

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Total undiscounted future operating lease payments 676  201  247 
Discount rate1 2.80% 2.60% 2.64%
 
Total present value of future operating lease payments 582  185  228 

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-15).

1 Weighted-average interest rate for Mastercard Inc.’s debt

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 2.80%
2019 72  2019 72  70 
2020 75  2020 75  71 
2021 76  2021 76  70 
2022 68  2022 68  61 
2023 58  2023 58  51 
2024 and thereafter 327  2024 58  49 
2025 58  48 
2026 58  47 
2027 58  45 
2028 58  44 
2029 37  27 
Total: 676  676  582 

Based on: 10-K (filing date: 2019-02-13).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 2.60%
2018 64  2018 64  62 
2019 36  2019 36  34 
2020 41  2020 41  38 
2021 20  2021 20  18 
2022 2022
2023 and thereafter 34  2023
2024
2025
2026
2027
2028
Total: 201  201  185 

Based on: 10-K (filing date: 2018-02-14).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 2.64%
2017 66  2017 66  64 
2018 53  2018 53  50 
2019 40  2019 40  37 
2020 29  2020 29  26 
2021 20  2021 20  18 
2022 and thereafter 39  2022 20  17 
2023 19  16 
Total: 247  247  228 

Based on: 10-K (filing date: 2017-02-15).


Adjustments to Financial Statements for Operating Leases

Mastercard Inc., adjustments to financial statements

US$ in millions

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Adjustment to Total Assets
Total assets (as reported) 33,584  29,236  24,860  21,329  18,675 
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)1 —  —  582  185  228 
Total assets (adjusted) 33,584  29,236  25,442  21,514  18,903 
Adjustment to Total Debt
Total debt (as reported) 12,672  8,527  6,334  5,424  5,180 
Add: Operating lease liability (before adoption of FASB Topic 842)2 —  —  582  185  228 
Add: Operating lease liabilities (recorded on Other current liabilities) 125  106  —  —  — 
Add: Operating lease liabilities (recorded on Other liabilities) 726  656  —  —  — 
Total debt (adjusted) 13,523  9,289  6,916  5,609  5,408 

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-15).

1, 2 Equal to total present value of future operating lease payments.


Mastercard Inc., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios for Operating Leases (Summary)

Mastercard Inc., adjusted financial ratios

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Total Asset Turnover1
Reported total asset turnover 0.46 0.58 0.60 0.59 0.58
Adjusted total asset turnover 0.46 0.58 0.59 0.58 0.57
Debt to Equity2
Reported debt to equity 1.98 1.45 1.17 0.99 0.92
Adjusted debt to equity 2.12 1.58 1.28 1.03 0.96
Return on Assets3 (ROA)
Reported ROA 19.09% 27.77% 23.57% 18.36% 21.73%
Adjusted ROA 19.09% 27.77% 23.03% 18.20% 21.47%

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-15).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Mastercard Inc.’s adjusted total asset turnover ratio deteriorated from 2018 to 2019 and from 2019 to 2020.
Adjusted debt to equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. Mastercard Inc.’s adjusted debt to equity ratio deteriorated from 2018 to 2019 and from 2019 to 2020.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Mastercard Inc.’s adjusted ROA improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

Mastercard Inc., Financial Ratios: Reported vs. Adjusted


Adjusted Total Asset Turnover

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net revenue 15,301  16,883  14,950  12,497  10,776 
Total assets 33,584  29,236  24,860  21,329  18,675 
Activity Ratio
Total asset turnover1 0.46 0.58 0.60 0.59 0.58
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net revenue 15,301  16,883  14,950  12,497  10,776 
Adjusted total assets 33,584  29,236  25,442  21,514  18,903 
Activity Ratio
Adjusted total asset turnover2 0.46 0.58 0.59 0.58 0.57

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-15).

2020 Calculations

1 Total asset turnover = Net revenue ÷ Total assets
= 15,301 ÷ 33,584 = 0.46

2 Adjusted total asset turnover = Net revenue ÷ Adjusted total assets
= 15,301 ÷ 33,584 = 0.46

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Mastercard Inc.’s adjusted total asset turnover ratio deteriorated from 2018 to 2019 and from 2019 to 2020.

Adjusted Debt to Equity

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Total debt 12,672  8,527  6,334  5,424  5,180 
Total Mastercard Incorporated stockholders’ equity 6,391  5,893  5,395  5,468  5,656 
Solvency Ratio
Debt to equity1 1.98 1.45 1.17 0.99 0.92
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Adjusted total debt 13,523  9,289  6,916  5,609  5,408 
Total Mastercard Incorporated stockholders’ equity 6,391  5,893  5,395  5,468  5,656 
Solvency Ratio
Adjusted debt to equity2 2.12 1.58 1.28 1.03 0.96

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-15).

2020 Calculations

1 Debt to equity = Total debt ÷ Total Mastercard Incorporated stockholders’ equity
= 12,672 ÷ 6,391 = 1.98

2 Adjusted debt to equity = Adjusted total debt ÷ Total Mastercard Incorporated stockholders’ equity
= 13,523 ÷ 6,391 = 2.12

Solvency ratio Description The company
Adjusted debt-to-equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. Mastercard Inc.’s adjusted debt-to-equity ratio deteriorated from 2018 to 2019 and from 2019 to 2020.

Adjusted Return on Assets (ROA)

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income 6,411  8,118  5,859  3,915  4,059 
Total assets 33,584  29,236  24,860  21,329  18,675 
Profitability Ratio
ROA1 19.09% 27.77% 23.57% 18.36% 21.73%
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net income 6,411  8,118  5,859  3,915  4,059 
Adjusted total assets 33,584  29,236  25,442  21,514  18,903 
Profitability Ratio
Adjusted ROA2 19.09% 27.77% 23.03% 18.20% 21.47%

Based on: 10-K (filing date: 2021-02-12), 10-K (filing date: 2020-02-14), 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-15).

2020 Calculations

1 ROA = 100 × Net income ÷ Total assets
= 100 × 6,411 ÷ 33,584 = 19.09%

2 Adjusted ROA = 100 × Net income ÷ Adjusted total assets
= 100 × 6,411 ÷ 33,584 = 19.09%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Mastercard Inc.’s adjusted ROA improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.