What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-01-29 compared with 2020-07-31 · 82 added, 162 removed, 209 unchanged (54% of the section changed)

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and its subsidiaries (“Visa,” “we,” “us,” “our” or the “Company”) on a historical basis and outlines the factors that have affected recent earnings, as well as those factors that may affect future earnings.

The following discussion and analysis should be read in conjunction with our unaudited consolidated financial statements and related notes included elsewhere in this report.

The following discussion and analysis should be read in conjunction with our unaudited consolidated financial statements and related notes included in Item 1—Financial Statements of this report.

Forward-Looking Statements

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Private Securities Litigation Reform Act of 1995 that relate to, among other things, the impact on our future financial position, results of operations and cash flows as a result of the coronavirus (“COVID-19”);

our future operations, prospects, developments, strategies and growth of our business;

prospects, developments, strategies and growth of our business;

anticipated expansion of our products in certain countries;

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Except as required by law, we do not intend to update or revise any forward-looking statements as a result of new information, future events or otherwise.

Visa is a global payments technology company that enables fast, secure and reliable electronic payments across more than 200 countries and territories.

We facilitate global commerce through the transfer of value and information among a global network of consumers, merchants, financial institutions, businesses, strategic partners and government entities.

Visa is a global payments technology company that enables innovative, secure and reliable electronic payments across more than 200 countries and territories.

We facilitate digital payments across a global network of consumers, merchants, financial institutions, businesses, strategic partners and government entities through innovative technologies.

Our advanced transaction processing network, VisaNet, enables authorization, clearing and settlement of payment transactions and allows us to provide our financial institution and merchant clients a wide range of products, platforms and value added services.

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Three Months Ended

June 30, 2020 vs.

2019 Nine Months Ended

June 30, 2020 vs.

(in millions, except percentages and per share data)

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Our priority remains the safety of our employees, clients and the communities in which we live and operate.

We are taking a measured approach in bringing our employees back in the office and will continue to have most of our employees work remotely for the rest of 2020.

We continue to remain in close and regular contact with our employees, clients, partners and governments globally to help them navigate these challenging times.

Revenues in the third quarter of fiscal 2020 were impacted by declines in volumes and transactions as a result of social distancing, shelter-in-place or total lock-down orders imposed by countries that began in the second quarter of fiscal 2020.

In the quarter, we saw spending improve each month as most countries began to relax these restrictions.

Cross-border volume however, continued to be heavily impacted by the decline in travel, which only improved moderately through the quarter.

While we have taken measures to modify our business practices and reduce operating expenses, including scaling back hiring plans, restricting travel, lowering marketing spend and the use of external resources, the impact that COVID-19 will have on our business remains difficult to predict due to numerous uncertainties, including the transmissibility, severity and duration of the outbreak, the effectiveness of social distancing measures or actions that are voluntarily adopted by the public or required by governments or public health authorities, the development and availability of effective treatments or vaccines, the impact to our employees and our operations, the business of our clients, supplier and business partners and other factors identified in Part II, Item 1A “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, filed with the SEC on May 4, 2020.

We are taking a measured approach in bringing our employees back in the office, with most of our employees currently working remotely.

We continue to remain in close and regular contact with our employees, clients, partners and with governments globally to help them navigate these challenging times.

Revenues in the first quarter of fiscal 2021 were at varying stages of recovery.

During the quarter, there was year-over-year growth in payments volume and processed transactions.

While cross-border volume did improve during the quarter, it remains depressed as the majority of borders remain closed.

Although we have taken measures to modify our business practices and reduce operating expenses, including scaling back hiring plans, restricting travel, lowering marketing spend and the use of external resources, the impact that COVID-19 will have on our business remains difficult to predict due to numerous uncertainties, including the transmissibility, severity and duration of the outbreak, the effectiveness of social distancing measures or actions that are voluntarily adopted by the public or required by governments or public health authorities, the development and availability of effective treatments or vaccines, and the impact to our employees and our operations, the business of our clients, supplier and business partners, and other factors identified in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended September 30 2020, filed with the SEC on November 19, 2020.

We will continue to evaluate the nature and extent of the impact to our business.

Highlights for the first nine months of fiscal 2020.

Net revenues for the three and nine months ended June 30, 2020 were $4.8 billion and $16.7 billion, respectively, and decreased 17% and 1%, respectively, over the prior-year comparable periods, driven by the year-over-year changes in nominal payments volume, nominal cross-border volume and processed transactions, which were impacted by the spread of COVID-19 globally starting in the latter part of March 2020.

Exchange rate movements in the three and nine months ended June 30, 2020, as partially mitigated by our hedging program, negatively impacted our net revenues by approximately one half of a percentage point and one percentage point, respectively.

Total operating expenses for the three months ended June 30, 2020 were $1.8 billion, and decreased 5% over the prior-year comparable period, on both a GAAP and non-GAAP basis, driven by our overall cost reduction strategy.

Total operating expenses for the nine months ended June 30, 2020 were $5.8 billion, on both a GAAP and non-GAAP basis, and increased 4% and 3%, respectively, over the prior-year comparable period, primarily due to higher depreciation and amortization from our ongoing investments and personnel in support of our strategy for future growth.

Highlights for the first quarter of fiscal 2021.

Net revenues for the three months ended December 31, 2020 were $5.7 billion, and decreased 6% over the prior-year comparable period, driven by the year-over-year changes in cross-border volume, which were impacted by the spread of COVID-19 globally starting in the latter part of March 2020, and higher client incentives.

The decrease in net revenues were partially offset by growth in nominal payments volume and processed transactions.

Exchange rate movements in the three months ended December 31, 2020, as partially mitigated by our hedging program, positively impacted our net revenues by approximately one half of a percentage point.

Total operating expenses for the three months ended December 31, 2020 were $1.8 billion, and decreased 10% over the prior-year comparable period, on both a GAAP and non-GAAP basis, driven by our overall cost reduction strategy.

Non-GAAP financial results.

We use non-GAAP financial measures of our performance which exclude certain items which we believe are not representative of our continuing operations and may distort our longer-term operating trends.

We consider non-GAAP measures useful to investors because they provide greater transparency into management’s view and assessment of our ongoing operating performance.

Starting in fiscal 2020, we revised our non-GAAP methodology to exclude the impact of gains and losses on our equity investments, amortization of acquired intangible assets and acquisition-related costs for acquisitions that closed in fiscal 2019 and subsequent periods.

Prior year amounts have been restated to conform to our current presentation.

We use non-GAAP financial measures of our performance which exclude certain items which we believe are not representative of our continuing operations, as they may be non-recurring or have no cash impact, and may distort our longer-term operating trends.

We consider non-GAAP measures useful to

investors because they provide greater transparency into management’s view and assessment of our ongoing operating performance.

• Gains and losses on equity investments.

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Gains and losses and the related tax impacts associated with these investments are tied to the performance of the companies that we invest in and therefore do not correlate to the underlying performance of our business.

During the three and nine months ended June 30, 2020, we recorded net realized and unrealized gains of $51 million and $62 million, respectively, and related tax expense of $11 million and $14 million, respectively.

For the same prior-year comparable periods, we recorded net realized and unrealized gains of $9 million and $89 million, respectively, and related tax expense of $3 million and $21 million, respectively.

• Amortization of acquired intangible assets.

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As such, we have excluded this amount and the related tax impact to facilitate an evaluation of our current operating performance and comparison to our past operating performance.

During the three and nine months ended June 30, 2020, we recorded amortization of acquired intangible assets of $13 million and $35 million, respectively, and related tax benefit of $3 million and $8 million, respectively.

For the same prior-year comparable periods, we recorded amortization of acquired intangible assets of $2 million.

• Acquisition-related costs.

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We have excluded these amounts and the related tax impacts as the expenses are recognized for a limited duration and do not reflect the underlying performance of our business.

During the three months ended June 30, 2020, we recorded acquisition-related costs of $4 million.

During the nine months ended June 30, 2020, we recorded acquisition-related costs of $11 million and related tax benefit of $2 million.

For the same prior-year comparable periods, we recorded acquisition-related costs of $3 million and related tax benefit of $1 million.

Non-GAAP operating expense, non-operating income (expense), income tax provision, effective income tax rate, net income and diluted earnings per share should not be relied upon as substitutes for, or considered in isolation from, measures calculated in accordance with U.S.

The following tables reconcile our as-reported financial measures, calculated in accordance with U.S.

GAAP, to our respective non-GAAP financial measures for the three and nine months ended June 30, 2020 and 2019.

Three Months Ended June 30, 2020

Operating Expenses Non-operating Income (Expense) Income Tax Provision Effective Income Tax Rate (1)

Net Income Diluted Earnings Per Share (1)

(in millions, except percentages and per share data)

As reported $ 1,838 $ (67) $ 559 19.1 % $ 2,373 $ 1.07

(Gains) Losses on equity investments, net — (51) (11) (40) (0.02)

Amortization of acquired intangible assets (13) — 3 10 —

Acquisition-related costs (4) — — 4 —

Non-GAAP $ 1,821 $ (118) $ 551 19.0 % $ 2,347 $ 1.06

Nine Months Ended June 30, 2020

Operating Expenses Non-operating Income (Expense) Income Tax Provision Effective Income Tax Rate (1)

Net Income Diluted Earnings Per Share (1)

(in millions, except percentages and per share data)

As reported $ 5,806 $ (204) $ 2,006 18.7 % $ 8,729 $ 3.92

(Gains) Losses on equity investments, net — (62) (14) (48) (0.02)

Amortization of acquired intangible assets (35) — 8 27 0.01

Acquisition-related costs (11) — 2 9 —

Non-GAAP $ 5,760 $ (266) $ 2,002 18.7 % $ 8,717 $ 3.91

Three Months Ended June 30, 2019

GAAP, to our respective non-GAAP financial measures for the three months ended December 31, 2020 and 2019.

Three Months Ended December 31, 2020

Operating Expenses Non-operating Income (Expense) Income Tax Provision Effective Income Tax Rate (1)

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Non-GAAP $ 1,828 $ (112) $ 622 16.6 % $ 3,125 $ 1.42

Nine Months Ended June 30, 2019

Three Months Ended December 31, 2019

Operating Expenses Non-operating Income (Expense) Income Tax Provision Effective Income Tax Rate (1)

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In January 2020, our board of directors authorized a $9.5 billion share repurchase program (the “January 2020 Program”).

During the three months ended June 30, 2020, we repurchased 6 million shares of our class A common stock in the open market for $1.1 billion.

As of June 30, 2020, our January 2020 Program had remaining authorized funds of $7.0 billion for share repurchase.

During the three months ended December 31, 2020, we repurchased 9 million shares of our class A common stock in the open market for $1.8 billion.

As of December 31, 2020, our January 2020 Program had remaining authorized funds of $3.7 billion.

In January 2021, our board of directors authorized an additional $8.0 billion share repurchase program.

See Note 9—Stockholders’ Equity to our unaudited consolidated financial statements.

On January 13, 2020, we entered into a definitive agreement to acquire Plaid, Inc.

for $5.3 billion.

We will pay approximately $4.9 billion of cash and $0.4 billion of retention equity and deferred equity consideration.

This acquisition is subject to customary closing conditions, including ongoing regulatory reviews and approvals , which are expected to be completed by the end of 2020 .

Senior notes.

In April 2020, we issued fixed-rate senior notes in an aggregate principal amount of $4.0 billion, with maturities ranging between 7 and 20 years.

See Note 8—Debt to our unaudited consolidated financial statements.

Payments volume and transaction counts.

On January 12, 2021, Visa and Plaid Inc.

mutually terminated their merger agreement announced on January 13, 2020.

See Note 2—Acquisitions and Note 13—Legal Matters to our unaudited consolidated financial statements.

Payments volume and processed transactions.

Payments volume is the primary driver for our service revenues, and the number of processed transactions is the primary driver for our data processing revenues.

Nominal payments volume in the United States posted mid to high single-digit growth for the three and nine months ended March 31, 2020 (1) , respectively, driven mainly by consumer debit and commercial, partially offset by decreased spending beginning in the latter part of March 2020 as countries imposed social distancing, shelter-in-place or total lock-down orders.

Nominal international payments volume declined as a result of decreased spending related to social distancing, shelter-in-place or total lock-down orders and unfavorable movements in U.S.

Nominal payments volume growth in the U.S.

for the three months ended September 30, 2020 (1) was 7%, while nominal international payments volume growth was negatively impacted by movements in U.S.

dollar exchange rates.

On a constant-dollar basis, which excludes the impact of exchange rate movements, our international payments volume growth rate for the three and nine months ended March 31, 2020 was 3% and 7%, respectively.

Processed transactions declined 13% for the three months ended June 30, 2020 as a result of social distancing, shelter-in-place or total lock-down orders.

Processed transactions grew 1% for the nine months ended June 30, 2020, reflecting the ongoing worldwide shift to electronic payments, partially offset by the impact of social distancing, shelter-in-place or total lock-down orders.

On a constant-dollar basis, which excludes the impact of exchange rate movements, our international payments volume growth for the three months ended September 30, 2020 was 1%.

Growth in processed transactions reflects the ongoing worldwide shift to electronic payments, partially offset by the impact of COVID-19.

The following table presents nominal payments and cash volume:

United States International Visa Inc.

Three Months Ended March 31, (1)

Three Months Ended September 30, (1)

2020 2019 % Change (2)

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$ 1,262 $ 1,168 8 % $ 1,733 $ 1,814 (5) % $ 2,995 $ 2,983 — %

United States International Visa Inc.

Nine Months Ended March 31, (1)

2020 2019 % Change (2)

(in billions, except percentages)

Nominal payments volume

Consumer credit $ 1,200 $ 1,139 5 % $ 1,875 $ 1,857 1 % $ 3,074 $ 2,996 3 %

Consumer debit (3)

1,358 1,249 9 % 1,526 1,392 10 % 2,883 2,641 9 %

Commercial (4)

502 466 8 % 299 284 5 % 800 749 7 %

Total nominal payments volume (2)

$ 3,059 $ 2,854 7 % $ 3,699 $ 3,533 5 % $ 6,758 $ 6,386 6 %

Cash volume 432 427 1 % 1,645 1,703 (3) % 2,077 2,129 (2) %

Total nominal volume (2),(5)

$ 3,491 $ 3,280 6 % $ 5,344 $ 5,236 2 % $ 8,835 $ 8,516 4 %

The following table presents nominal and constant payments and cash volume growth:

International Visa Inc.

Ended March 31,

Nominal Constant (6)

Ended September 30,

Nominal Constant (6)

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(1) Service revenues in a given quarter are assessed based on nominal payments volume in the prior quarter.

Therefore, service revenues reported for the three and nine months ended June 30, 2020 and 2019 were based on nominal payments volume reported by our financial institution clients for the three and nine months ended March 31, 2020 and 2019, respectively.

Therefore, service revenues reported for the three months ended December 31, 2020 and 2019 were based on nominal payments volume reported by our financial institution clients for the three months ended September 30, 2020 and 2019, respectively.

(2) Figures in the table may not recalculate exactly due to rounding.

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On occasion, previously presented volume information may be updated.

Prior-period updates, other than the change to the payments volume definition, are not material.

Prior-period updates are not material.

(6) Growth on a constant-dollar basis excludes the impact of foreign currency fluctuations against the U.S.

The following table provides the number of transactions involving cards and other form factors carrying the Visa, Visa Electron, Interlink, V PAY and PLUS cards processed on Visa’s networks during the periods presented:

Three Months Ended June 30, Nine Months Ended June 30,

Three Months Ended

(in millions, except percentages)

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Three Months Ended

June 30, 2020 vs.

2019 Nine Months Ended

June 30, 2020 vs.

(in millions, except percentages)

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Percentage changes are calculated based on unrounded numbers.

Net revenues decreased primarily due to the year-over-year changes in payments volume, cross-border volume and processed transactions, which were impacted by COVID-19 starting in the latter part of March 2020.

Net revenues decreased primarily due to the year-over-year changes in cross-border volume, which were impacted by COVID-19 starting in the latter part of March 2020, and higher client incentives.

The decrease in net revenues was partially offset by growth in nominal payments volume and processed transactions.

Our net revenues are impacted by the overall strengthening or weakening of the U.S.

dollar as payments volume and related revenues denominated in local currencies are converted to U.S.

The following table sets forth the components of our net revenues:

Three Months Ended

June 30, 2020 vs.

2019 Nine Months Ended

June 30, 2020 vs.

(in millions, except percentages)

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Percentage changes are calculated based on unrounded numbers.

• Service revenues were flat in the third quarter of fiscal 2020 as COVID-19 spread globally starting in the latter part of March 2020 with a 2% growth in nominal payments volume during the three-month comparable period.

Service revenues grew 6% during the nine-month comparable period, in line with nominal payments volume growth of 6%.

• Data processing revenues were impacted by a decline in processed transactions of 13% and growth of 1% during the three-month and nine-month comparable periods, respectively, as a result of the spread of COVID-19 globally starting in the latter part of March 2020.

Data processing revenues benefited from value-added services, acquisition-related revenues and favorable business mix.

For the nine-month comparable period, data processing revenues also benefited from select pricing modifications effective in 2019.

• International transaction revenues driven by nominal cross-border volumes, excluding transactions within Europe, declined 48% and 16% during the three-month and nine-month comparable periods, respectively, as COVID-19 spread globally starting in the latter part of March 2020.

For the three-month comparable period, international transaction revenues were also impacted by fluctuations in the volatility of a broad range of currencies and favorable business mix.

For the nine-month comparable period, international transaction revenues benefited from select pricing modifications effective in 2019.

• Other revenues decreased in the third quarter of fiscal 2020 primarily due to lower marketing services revenues, lower value-added services revenues tied to travel-related card benefits and non-recurring revenues in the prior year three-month comparable period.

For the nine-month comparable period, other revenues increased primarily due to consulting and marketing services related fees and other value-added services.

• Client incentives decreased during the three-month comparable period in correlation with the decline in payments volumes and revenues.

In the nine-month comparable period, client incentives increased mainly due to incentives recognized on long-term customer contracts that were initiated or renewed in the past 12 months partially offset by the recent decline in global payments volume.

• Service revenues increased primarily due to 4% growth in nominal payments volume.

Service revenues were also impacted by select pricing modifications and business mix.

• Data processing revenues increased mainly due to overall growth in processed transactions of 4% and growth in value added services.

• International transaction revenues decreased due to a 32% decline in nominal cross-border volumes, excluding transactions within Europe, as COVID-19 spread globally starting in the latter part of March 2020.

International transaction revenues were also impacted by fluctuations in the volatility of a broad range of currencies and business mix.

• Other revenues increased primarily due to higher consulting and marketing related fees and other value added services revenues.

• Client incentives increased in correlation with the increase in payments volumes.

The amount of client incentives we record in future periods will vary based on changes in performance expectations, actual client performance, amendments to existing contracts or execution of new contracts.

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Three Months Ended

June 30, 2020 vs.

2019 Nine Months Ended

June 30, 2020 vs.

(in millions, except percentages)

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Percentage changes are calculated based on unrounded numbers.

• Personnel expenses increased primarily due to continued increase in headcount in support of our investment strategy for future growth, offset by lower incentive compensation.

• Marketing expenses decreased reflecting our overall cost reduction strategy, the absence of FIFA Women's World Cup in fiscal 2020 and the delay of the Tokyo Olympics to fiscal 2021.

The decrease is offset by an increase in client marketing spend during the nine-month comparable period.

• Marketing expenses decreased reflecting our overall cost reduction strategy.

• Professional fees decreased reflecting our overall cost reduction strategy.

• Depreciation and amortization expenses increased primarily due to additional depreciation and amortization from our on-going investments, including acquisitions.

• General and administrative expenses decreased primarily due to travel restrictions and our overall cost reduction strategy, offset by acquisition related expenses during the nine-months comparable period.

• Litigation provision decreased primarily due to lower accruals for uncovered litigation.

• General and administrative expenses decreased primarily due to travel restrictions, lower product enhancements costs and our overall cost reduction strategy.

Non-operating Income (Expense)

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Three Months Ended

June 30, 2020 vs.

2019 Nine Months Ended

June 30, 2020 vs.

(in millions, except percentages)

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Percentage changes are calculated based on unrounded numbers.

• Interest expense, net increased during the three-month comparable period primarily as a result of the issuance of debt in the third quarter of fiscal 2020, offset by derivative instruments that lowered the cost of borrowing on a portion of our outstanding debt.

Interest expense, net decreased during the nine-month comparable period primarily due to derivative instruments that lowered the cost of borrowing on a portion of our outstanding debt, offset by the issuance of debt in the third quarter of fiscal 2020.

• Investment income and other decreased primarily due to lower gains on our equity investments and lower interest income on our cash and investments.

• Interest expense, net increased primarily as a result of the issuance of debt in fiscal 2020.

• Investment income and other decreased primarily due to lower interest income on our cash and investments.

Effective Income Tax Rate

The effective income tax rates were 19 % for the three and nine months ended June 30, 2020, and 20 % and 19 % for the three and nine months ended June 30, 2019, respectively.

The difference in the effective tax rates between the three-month periods was primarily due to the change in geographic mix of income.

On July 22, 2020, UK enacted a legislation that repealed the previous tax rate reduction from 19% to 17% that was effective on April 1, 2020.

The repeal of the UK tax rate reduction is not expected to significantly increase our ongoing effective tax rate, however, it will result in a one-time non-cash tax expense in the fourth quarter of fiscal 2020, due to the re-measurement of deferred taxes which are primarily related to intangibles recorded in purchase accounting upon the acquisition of Visa Europe in fiscal 2016.

The following table sets forth our effective income tax rate:

Three Months Ended

2020 2019 Change

Effective income tax rate 17 % 18 % (1) %

The difference in the effective tax rates between the three months ended December 31, 2020 and 2019 was primarily due to an $81 million tax benefit recognized during the three months ended December 31, 2020 as a result of the conclusion of audits by taxing authorities.

Liquidity and Capital Resources

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The following table summarizes our cash flow activity for the periods presented:

Nine Months Ended

Three Months Ended

(in millions)

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Operating activities.

Cash provided by operating activities for the nine months ended June 30, 2020 was lower than the prior-year comparable period due to higher client incentives and timing of settlement.

Partially offset by lower cash paid for taxes and the receipt of the $467 million takedown payment associated with the Interchange Multidistrict Litigation.

See Note 14—Legal Matters to our unaudited consolidated financial statements.

Cash provided by operating activities for the three months ended December 31, 2020 was lower than the prior-year comparable period due to prior-year receipt of the $467 million takedown payment associated with the Interchange Multidistrict Litigation, partially offset by lower client incentives and lower cash paid for taxes.

Investing activities.

Cash provided by investing activities for the nine months ended June 30, 2020 increased primarily due to fewer purchases of investment securities as compared to the prior-year period.

Cash provided by investing activities for the three months ended December 31, 2020 increased primarily due to higher maturities and sales of investment securities, partially offset by higher purchases of investment securities as compared to the prior-year period.

Financing activities.

Cash used in financing activities for the nine months ended June 30, 2020 was lower than the prior-year comparable period primarily due to proceeds received from the issuance of senior notes and the absence of the deferred purchase consideration payment, made in the prior year.

Partially offset by higher share repurchase and higher dividends paid.

Cash used in financing activities for the three months ended December 31, 2020 was higher than the prior-year comparable period primarily due to the $3.0 billion principal debt payment upon maturity of our senior notes in December 2020 and higher dividends paid, partially offset by lower share repurchases.

See Note 7—Debt and Note 9—Stockholders’ Equity to our unaudited consolidated financial statements .

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Funds from operations are maintained in cash and cash equivalents and short-term or long-term available-for-sale investment securities based upon our funding requirements, access to liquidity from these holdings and the returns that these holdings provide.

Based on our current cash flow forecasts of our short-term and long-term liquidity needs, we believe that our current and projected sources of liquidity will be sufficient to meet our projected liquidity needs for more than the next 12 months.

Our ability to access cost-effective capital could be impacted by global credit market conditions.

Based on our current cash flow budgets and forecasts of our short-term and long-term liquidity needs, we believe that our current and projected sources of liquidity will be sufficient to meet our projected liquidity needs for more than the next 12 months.

We will continue to assess our liquidity position and potential sources of supplemental liquidity in view of our operating performance, current economic and capital market conditions and other relevant circumstances.

Commercial paper program.

We maintain a commercial paper program to support our working capital requirements and for other general corporate purposes.

During the three months ended June 30, 2020, we repaid $1.0 billion of commercial paper that was issued during the three months ended March 31, 2020.

We had no obligations outstanding under the program at June 30, 2020.

Senior notes .

In April 2020, we issued fixed-rate senior notes in an aggregate principal amount of $4.0 billion, with maturities ranging between 7 and 20 years.

See Note 8—Debt to our unaudited consolidated financial statements.

Uses of Liquidity

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Common stock repurchases.

During the nine months ended June 30, 2020, we repurchased 37 million shares of our class A common stock for $6.6 billion.

As of June 30, 2020, our January 2020 Program had remaining authorized funds of $7.0 billion for share repurchase.

During the three months ended December 31, 2020, we repurchased 9 million shares of our class A common stock for $1.8 billion.

As of December 31, 2020, our January 2020 Program had remaining authorized funds of $3.7 billion.

See Note 9—Stockholders’ Equity to our unaudited consolidated financial statements.

During the nine months ended June 30, 2020, we declared and paid $2.0 billion in dividends to holders of our common and preferred stock.

On July 20, 2020, our board of directors declared a cash dividend in the amount of $0.30 per share of class A common stock (determined in the case of class B and C common stock and UK&I and Europe preferred stock on an as-converted basis), which will be paid on September 1, 2020, to all holders of record as of August 14, 2020.

During the three months ended December 31, 2020, we declared and paid $703 million in dividends to holders of our common and preferred stock.

On January 26, 2021, our board of directors declared a cash dividend in the amount of $0.32 per share of class A common stock (determined in the case of class B and C common stock and series A, UK&I and Europe preferred stock on an as-converted basis), which will be paid on March 1, 2021, to all holders of record as of February 12, 2021.

See Note 9—Stockholders’ Equity to our unaudited consolidated financial statements.

We expect to continue paying quarterly dividends in cash, subject to approval by the board of directors.

All three series of preferred stock and class B and C common stock will share ratably on an as-converted basis in such future dividends.

All preferred and class B and C common stock will share ratably on an as-converted basis in such future dividends.

Senior notes .

A principal payment of $3.0 billion is due on December 14, 2020 on our fixed-rate senior notes issued in December 2015, for which we have sufficient liquidity.

In December 2020, a principal payment of $3.0 billion was made on our fixed-rate senior notes issued in December 2015.

See Note 7—Debt to our unaudited consolidated financial statements.

On January 13, 2020, we entered into a definitive agreement to acquire Plaid, Inc.

for $5.3 billion.

We will pay approximately $4.9 billion of cash and $0.4 billion of retention equity and deferred equity consideration.

This acquisition is subject to customary closing conditions, including ongoing regulatory reviews and approvals, which are expected to be completed by the end of 2020 .

We intend to fund the acquisition with cash, cash equivalents and investments, as well as through the issuance of new indebtedness.

Accounting Pronouncements Not Yet Adopted

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Board Update (“ASU”) 2019-12, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in the existing guidance for income taxes and making other minor improvements.

The amendments in the ASU are effective on October 1, 2021.

The adoption is not expected to have a material impact on our consolidated financial statements.

In January 2020, the FASB issued ASU 2020-01, which clarifies that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the fair value measurement alternative.

The amendments in the ASU are effective on October 1, 2021.

The adoption is not expected to have a material impact on our consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, which provides optional expedients and exceptions for applying U.S.

GAAP to contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate or another reference rate expected to be discontinued because of reference rate reform.

Subsequently, the FASB also issued an amendment to this standard.

The amendments in the ASU are effective upon issuance through December 31, 2022.

We are evaluating the effect ASU 2020-04 and its subsequent amendment will have on our consolidated financial statements.

Quantitative and Qualitative Disclosures about Market Risk

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis