Name: Mastercard Inc. (NYSE:MA) | Cash Flow Statement
Creator: Stock Analysis on Net

Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

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Mastercard Inc., consolidated cash flow statement

US$ in millions

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net income	9,930)	8,687)	6,411)	8,118)	5,859)
Amortization of customer and merchant incentives	1,586)	1,371)	1,072)	1,141)	1,235)
Depreciation and amortization	750)	726)	580)	522)	459)
(Gains) losses on equity investments, net	145)	(645)	(30)	(167)	—)
Share-based compensation	295)	273)	254)	250)	196)
Deferred income taxes	(651)	(69)	73)	(7)	(244)
Other	44)	36)	14)	24)	31)
Accounts receivable	(481)	(397)	(86)	(246)	(317)
Income taxes receivable	12)	(87)	(2)	(202)	(120)
Settlement assets	48)	390)	1,288)	(444)	(1,078)
Prepaid expenses	(2,175)	(2,087)	(1,552)	(1,661)	(1,769)
Accrued litigation and legal settlements	240)	(1)	(73)	(662)	869)
Restricted security deposits held for customers	(305)	177)	326)	290)	(6)
Accounts payable	190)	100)	26)	(42)	101)
Settlement obligations	201)	(568)	(1,242)	477)	849)
Accrued expenses	1,188)	1,355)	(114)	657)	439)
Long-term taxes payable	(121)	(52)	(37)	2)	(20)
Net change in other assets and liabilities	299)	254)	316)	133)	(261)
Changes in operating assets and liabilities	(904)	(916)	(1,150)	(1,698)	(1,313)
Adjustments to reconcile net income to net cash provided by operating activities	1,265)	776)	813)	65)	364)
Net cash provided by operating activities	11,195)	9,463)	7,224)	8,183)	6,223)
Purchases of investment securities available-for-sale	(267)	(389)	(220)	(643)	(1,300)
Purchases of investments held-to-maturity	(239)	(294)	(198)	(215)	(509)
Proceeds from sales of investment securities available-for-sale	54)	83)	361)	1,098)	604)
Proceeds from maturities of investment securities available-for-sale	211)	291)	140)	376)	379)
Proceeds from maturities of investments held-to-maturity	265)	296)	121)	383)	929)
Purchases of property and equipment	(442)	(407)	(339)	(422)	(330)
Capitalized software	(655)	(407)	(369)	(306)	(174)
Purchases of equity investments	(88)	(228)	(214)	(467)	(91)
Proceeds from sales of equity investments	7)	186)	—)	—)	—)
Acquisition of businesses, net of cash acquired	(313)	(4,436)	(989)	(1,440)	—)
Settlement of interest rate derivative contracts	—)	—)	(175)	—)	—)
Other investing activities	(3)	33)	3)	(4)	(14)
Net cash used in investing activities	(1,470)	(5,272)	(1,879)	(1,640)	(506)
Purchases of treasury stock	(8,753)	(5,904)	(4,473)	(6,497)	(4,933)
Dividends paid	(1,903)	(1,741)	(1,605)	(1,345)	(1,044)
Proceeds from debt, net	1,123)	2,024)	3,959)	2,724)	991)
Payment of debt	(724)	(650)	—)	(500)	—)
Acquisition of redeemable non-controlling interests	(4)	—)	(49)	—)	—)
Acquisition of non-controlling interest	—)	(133)	—)	—)	—)
Contingent consideration paid	—)	(64)	—)	(199)	—)
Tax withholdings related to share-based payments	(141)	(133)	(150)	(161)	(80)
Cash proceeds from exercise of stock options	90)	61)	97)	126)	104)
Other financing activities	(16)	(15)	69)	(15)	(4)
Net cash used in financing activities	(10,328)	(6,555)	(2,152)	(5,867)	(4,966)
Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents	(103)	(153)	257)	(44)	(6)
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents	(706)	(2,517)	3,450)	632)	745)
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of period	9,902)	12,419)	8,969)	8,337)	7,592)
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period	9,196)	9,902)	12,419)	8,969)	8,337)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

The financial profile from 2018 to 2022 demonstrates a strong capacity for generating cash from operations, which is consistently used to fund aggressive shareholder returns, strategic acquisitions, and capital investments. While net income experienced a temporary dip in 2020, the overall trajectory of cash generation remained positive and grew substantially over the five-year period.

Operating Cash Flow Dynamics: Net cash provided by operating activities shows a strong upward trend, increasing from 6,223 million USD in 2018 to 11,195 million USD in 2022. This growth is supported by a steady rise in net income, which reached 9,930 million USD by 2022. Significant non-cash add-backs, particularly the amortization of customer and merchant incentives, consistently bolster operating cash flow, indicating a business model where high accounting expenses do not deplete actual cash reserves. Changes in operating assets and liabilities remained a net drag on cash throughout the period, though the magnitude of this impact narrowed from a peak of 1,698 million USD in 2019 to 904 million USD in 2022.
Investing Activities and Capital Expenditure: Investing activities are characterized by steady growth in infrastructure and technology spending, with purchases of property, equipment, and capitalized software increasing from a combined 504 million USD in 2018 to 1,097 million USD in 2022. A significant spike in cash outflows occurred in 2021, where net cash used in investing activities reached 5,272 million USD, primarily driven by 4,436 million USD spent on the acquisition of businesses. The company also maintains an active portfolio of investment securities, alternating between purchases and proceeds from maturities and sales to manage liquidity.
Financing Strategies and Shareholder Returns: Financing activities are dominated by a robust commitment to returning capital to shareholders. Purchases of treasury stock accelerated significantly, rising from 4,933 million USD in 2018 to 8,753 million USD in 2022. Simultaneously, dividend payments nearly doubled over the same period, growing from 1,044 million USD to 1,903 million USD. To support these outflows and strategic acquisitions, the company utilized debt markets, with proceeds from debt peaking at 3,959 million USD in 2020, although debt repayments have also increased in recent years.
Liquidity and Cash Position: The ending cash and restricted cash balance peaked in 2020 at 12,419 million USD before declining to 9,196 million USD by the end of 2022. This decline is attributable to the intensified pace of share repurchases and the large-scale acquisitions funded in 2021. Despite the decrease in absolute cash holdings, the company's high operating cash flow ensures a sustainable liquidity position capable of covering both operational needs and financial obligations.

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