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60
MASTERCARD INCORPORATED
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Years Ended December 31,
2013 2012 2011
(in millions)
Operating Activities
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,116 $ 2,759 $ 1,906
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258 230 194
Share-based payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 — 35
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (119) 241 (175)
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 52 17
Changes in operating assets and liabilities:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (42) (121) (162)
Income taxes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 (185) —
Settlement due from customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (194) (500) (114)
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (70) (81) 27
Accrued litigation and legal settlements. . . . . . . . . . . . . . . . . . . . . . . . 160 (44) 467
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (20) (2) 67
Settlement due to customers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322 348 74
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315 221 296
Net change in other assets and liabilities . . . . . . . . . . . . . . . . . . . . . . . 126 30 52
Net cash provided by operating activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,135 2,948 2,684
Investing Activities
Purchases of investment securities available-for-sale . . . . . . . . . . . . . . . . . (2,526) (2,981) (899)
Proceeds from sales of investment securities available-for-sale . . . . . . . . . 1,488 390 485
Proceeds from maturities of investment securities available-for-sale . . . . . 1,321 891 63
Purchases of property, plant and equipment. . . . . . . . . . . . . . . . . . . . . . . . . (155) (96) (77)
Capitalized software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (144) (122) (100)
Proceeds from maturities of investment securities held-to-maturity . . . . . . 36 — 300
Investment in nonmarketable equity investments . . . . . . . . . . . . . . . . . . . . (20) (118) (74)
Decrease (increase) in restricted cash for litigation settlement . . . . . . . . . . 3 (726) —
Acquisition of businesses, net of cash acquired . . . . . . . . . . . . . . . . . . . . . . — (70) (460)
Other investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7) (7) 14
Net cash used in investing activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) (2,839) (748)
Financing Activities
Purchases of treasury stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,443) (1,748) (1,148)
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (255) (132) (77)
Proceeds from debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 — —
Cash proceeds from exercise of stock options . . . . . . . . . . . . . . . . . . . . . . . 26 31 19
Tax benefit for share-based compensation. . . . . . . . . . . . . . . . . . . . . . . . . . 19 47 12
Other financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11) 4 (21)
Net cash used in financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,629) (1,798) (1,215)
Effect of exchange rate changes on cash and cash equivalents . . . . . . . . . . . . . . 45 7 (54)
Net increase (decrease) in cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . 1,547 (1,682) 667
Cash and cash equivalents - beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . 2,052 3,734 3,067
Cash and cash equivalents - end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,599 $ 2,052 $ 3,734
The accompanying notes are an integral part of these consolidated financial statements.