What changed in this filing

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Item 1. Financial Statements

2022-01-28 compared with 2021-07-29 · 157 added, 303 removed, 557 unchanged (45% of the section changed)

34 unchanged sentences

Preferred stock, $ 0.0001 par value, 25 shares authorized and 5 shares issued and outstanding as follows:

Series A convertible participating preferred stock, less than one shares issued and outstanding at June 30, 2021 and September 30, 2020 (the “series A preferred stock”) 538 2,437

Series B convertible participating preferred stock, 2 shares issued and outstanding at June 30, 2021 and September 30, 2020 (the “UK&I preferred stock”)

Series C convertible participating preferred stock, 3 shares issued and outstanding at June 30, 2021 and September 30, 2020 (the “Europe preferred stock”)

Class A common stock, $ 0.0001 par value, 2,001,622 shares authorized, 1,689 and 1,683 shares issued and outstanding at June 30, 2021 and September 30, 2020, respectively

Class B common stock, $ 0.0001 par value, 622 shares authorized, 245 shares issued and outstanding at June 30, 2021 and September 30, 2020

Class C common stock, $ 0.0001 par value, 1,097 shares authorized, 10 and 11 shares issued and outstanding at June 30, 2021 and September 30, 2020, respectively

Series A convertible participating preferred stock, less than one shares issued and outstanding at December 31, 2021 and September 30, 2021 (the “series A preferred stock”)

Series B convertible participating preferred stock, 2 shares issued and outstanding at December 31, 2021 and September 30, 2021 (the “series B preferred stock”)

Series C convertible participating preferred stock, 3 shares issued and outstanding at December 31, 2021 and September 30, 2021 (the “series C preferred stock”)

Class A common stock, $ 0.0001 par value, 2,001,622 shares authorized, 1,661 and 1,677 shares issued and outstanding at December 31, 2021 and September 30, 2021 respectively

Class B common stock, $ 0.0001 par value, 622 shares authorized, 245 shares issued and outstanding at December 31, 2021 and September 30, 2021

Class C common stock, $ 0.0001 par value, 1,097 shares authorized, 10 shares issued and outstanding at December 31, 2021 and September 30, 2021

Right to recover for covered losses ( 111 ) ( 133 )

12 unchanged sentences

Three Months Ended

June 30, Nine Months Ended

2021 2020 2021 2020

(in millions, except per share data)

36 unchanged sentences

Three Months Ended

June 30, Nine Months Ended

2021 2020 2021 2020

(in millions)

4 unchanged sentences

Income tax effect 2 —

Reclassification adjustments ( 1 ) ( 1 ) ( 1 ) ( 3 )

Income tax effect — 1 — 1

Defined benefit pension and other postretirement plans:

13 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Three Months Ended June 30, 2021

Three Months Ended December 31, 2021

Preferred Stock Common Stock Preferred Stock Right to Recover for Covered Losses Additional

3 unchanged sentences

Income (Loss), Net Total

Series A Series B Series C Class A Class B Class C

A Series B Series C Class A Class B Class C

(in millions, except per share data)

Balance as of March 31, 2021 — (1)

Balance as of September 30, 2021 — (1)

2 3 1,677 245 10 $ 3,080 $ ( 133 ) $ 18,855 $ 15,351 $ 436 $ 37,589

1 unchanged sentence

Other comprehensive income (loss), net of tax

( 508 ) ( 508 )

Comprehensive income 3,451

4 unchanged sentences

Conversion of class C common stock upon sales into public market

Vesting of restricted stock and performance-based shares

Share-based compensation, net of forfeitures 128 128

Vesting of restricted stock and performance-based shares

Restricted stock and performance-based shares settled in cash for taxes

( 113 ) ( 113 )

Cash proceeds from issuance of class A common stock under employee equity plans (1)

2 unchanged sentences

Repurchase of class A common stock ( 19 ) ( 209 ) ( 3,895 ) ( 4,104 )

Balance as of June 30, 2021 — (1)

Balance as of December 31, 2021 — (1)

2 3 1,661 245 10 $ 2,995 $ ( 111 ) $ 18,776 $ 14,606 $ ( 72 ) $ 36,194

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—(Continued)

Nine Months Ended June 30, 2021

Three Months Ended December 31, 2020

Preferred Stock Common Stock Preferred Stock Right to Recover for Covered Losses Additional

16 unchanged sentences

Conversion of class C common stock upon sales into public market

Vesting of restricted stock and performance-based shares

Share-based compensation, net of forfeitures

Restricted stock and performance-based shares settled in cash for taxes

( 1 ) ( 142 ) ( 142 )

Cash proceeds from issuance of common stock under employee equity plans

Cash dividends declared and paid, at a quarterly amount of $ 0.32 per class A common stock

( 2,102 ) ( 2,102 )

Repurchase of class A common stock ( 27 ) ( 287 ) ( 5,422 ) ( 5,709 )

Balance as of June 30, 2021 — (1)

2 3 1,689 245 10 $ 3,132 $ ( 24 ) $ 18,787 $ 15,294 $ 601 $ 37,790

(1) Increase, decrease or balance is less than one million shares.

See accompanying notes, which are an integral part of these unaudited consolidated financial statements.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—(Continued)

Three Months Ended June 30, 2020

Preferred Stock Common Stock Preferred Stock Right to Recover for Covered Losses Additional

Paid-In Capital Accumulated

Income Accumulated

Comprehensive

Income (Loss), Net Total

Series B Series C Class A Class B Class C

(in millions, except per share data)

Balance as of March 31, 2020 2 3 1,693 245 11 $ 5,462 $ ( 184 ) $ 16,385 $ 13,366 $ ( 444 ) $ 34,585

Net income 2,373 2,373

Other comprehensive income (loss), net of tax

Comprehensive income 2,538

VE territory covered losses incurred ( 9 ) ( 9 )

Recovery through conversion rate adjustment ( 164 ) 169 5

Vesting of restricted stock and performance-based shares

Share-based compensation, net of forfeitures 107 107

Restricted stock and performance-based shares settled in cash for taxes

( 1 ) ( 134 ) ( 134 )

Cash proceeds from issuance of class A common stock under employee equity plans — (1)

2 unchanged sentences

Repurchase of class A common stock ( 9 ) ( 95 ) ( 1,701 ) ( 1,796 )

Balance as of June 30, 2020 2 3 1,687 245 11 $ 5,298 $ ( 24 ) $ 16,457 $ 14,072 $ ( 279 ) $ 35,524

(1) Increase or decrease is less than one million shares.

See accompanying notes, which are an integral part of these unaudited consolidated financial statements.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—(Continued)

Nine Months Ended June 30, 2020

Preferred Stock Common Stock Preferred Stock Right to Recover for Covered Losses Additional

Paid-In Capital Accumulated

Income Accumulated

Comprehensive

Income (Loss), Net Total

Series B Series C Class A Class B Class C

(in millions, except per share data)

Balance as of September 30, 2019 2 3 1,718 245 11 $ 5,462 $ ( 171 ) $ 16,541 $ 13,502 $ ( 650 ) $ 34,684

Net income 8,729 8,729

Other comprehensive income (loss), net of tax

Comprehensive income 9,125

Adoption of new accounting standards 25 ( 25 ) —

VE territory covered losses incurred ( 22 ) ( 22 )

Recovery through conversion rate adjustment ( 164 ) 169 5

Conversion of class C common stock upon sales into public market

Vesting of restricted stock and performance-based shares

Share-based compensation, net of forfeitures

Restricted stock and performance-based shares settled in cash for taxes

( 1 ) ( 158 ) ( 158 )

Cash proceeds from issuance of common stock under employee equity plans

Cash dividends declared and paid, at a quarterly amount of $ 0.30 per class A common stock

Balance as of December 31, 2020 — (1)

2 3 1,696 245 11 $ 3,683 $ ( 34 ) $ 18,063 $ 14,813 $ 1,154 $ 37,679

Repurchase of class A common stock ( 37 ) ( 390 ) ( 6,182 ) ( 6,572 )

Balance as of June 30, 2020 2 3 1,687 245 11 $ 5,298 $ ( 24 ) $ 16,457 $ 14,072 $ ( 279 ) $ 35,524

(1) Increase or decrease is less than one million shares.

(1) Increase, decrease or balance is less than one million shares.

See accompanying notes, which are an integral part of these unaudited consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended

Three Months Ended

(in millions)

32 unchanged sentences

Dividends paid ( 809 ) ( 703 )

Proceeds from issuance of senior notes — 3,985

Cash proceeds from issuance of class A common stock under employee equity plans 59 61

Restricted stock and performance-based shares settled in cash for taxes ( 113 ) ( 134 )

Other financing activities — ( 118 )

Net cash provided by (used in) financing activities ( 4,967 ) ( 5,572 )

1 unchanged sentence

Increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents

( 1,476 ) ( 1,116 )

Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period 19,799 19,171

8 unchanged sentences

Organization.

(“Visa” or the “Company”) is a global payments technology company that enables innovative, secure and reliable electronic payments across more than 200 countries and territories.

Visa and its wholly-owned consolidated subsidiaries, including Visa U.S.A.

(“Visa U.S.A.”), Visa International Service Association (“Visa International”), Visa Worldwide Pte.

Limited, Visa Europe Limited (“Visa Europe”), Visa Canada Corporation (“Visa Canada”), Visa Technology & Operations LLC and CyberSource Corporation, operate one of the world’s largest electronic payments network — VisaNet — which facilitates authorization, clearing and settlement of payment transactions and enables the Company to provide its financial institution and seller clients a wide range of products, platforms and value added services.

(“Visa” or the “Company”) is a global payments technology company that facilitates global commerce and money movement across more than 200 countries and territories.

Visa and its wholly-owned consolidated subsidiaries operate one of the world’s largest electronic payments network — VisaNet — which provides transaction processing services (primarily authorization, clearing and settlement).

The Company offers products and solutions that facilitate secure, reliable and efficient money movement for all participants in the ecosystem.

Visa is not a financial institution and does not issue cards, extend credit or set rates and fees for account holders of Visa products.

9 unchanged sentences

In the opinion of management, the accompanying unaudited consolidated financial statements include all normal recurring adjustments necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the interim periods presented.

The results of operations for interim periods are not necessarily indicative of results for the full year.

Use of estimates.

2 unchanged sentences

These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited consolidated financial statements and reported amounts of revenues and expenses during the reporting period.

These estimates may change, as new events occur and additional information is obtained, and will be recognized in the unaudited consolidated financial statements in the period in which such changes occur.

These estimates may change as new events occur and additional information is obtained, and will be recognized in the period in which such changes occur.

Future actual results could differ materially from these estimates.

Coronavirus (“COVID-19”) has continued to create significant uncertainty in the global economy.

There have been no comparable recent events that provide guidance as to the effect COVID-19 as a global pandemic may have, and, as a result, the ultimate impact of COVID-19 and the extent to which COVID-19 continues to impact the Company’s business, results of operations and financial condition will depend on future developments, which are highly uncertain and difficult to predict.

As the effects of the evolving coronavirus (“COVID-19”) pandemic continue, much remains uncertain.

There have been no comparable recent events and as a result the ultimate impact of COVID-19 and the extent to which COVID-19 and new variants continue to impact the Company’s business, results of operations and financial condition will depend on future developments, which are highly uncertain and difficult to predict.

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Board Update (“ASU”) 2016-13, which requires the measurement and recognition of expected credit losses for financial assets and certain other instruments held at amortized cost.

The Company adopted the standard effective October 1, 2020 using the modified retrospective transition method with comparative periods continuing to be reported using the previous applicable guidance.

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

The Company adopted this guidance effective October 1, 2021.

The adoption did not have a material impact on the consolidated financial statements.

In accordance with ASU 2016-13, the Company uses a forward-looking expected credit loss model for financial instruments measured at amortized cost.

For available-for-sale debt securities, when credit loss indicators exist and a discounted cash flow approach results in a credit loss, the credit loss will be recorded through an allowance rather

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

than through an other-than-temporary impairment.

In addition to recording the fair value of its settlement indemnification liability, under the new standard, the Company estimates expected credit losses and recognizes an allowance for those credit losses related to its settlement indemnification obligations.

In January 2017, the FASB issued ASU 2017-04, which simplifies the accounting for goodwill impairments by eliminating Step 2 from the goodwill impairment test.

Under the amendments in ASU 2017-04, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of the reporting unit with its carrying amount, which is Step 1 of the goodwill impairment test.

An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit.

The Company adopted the standard effective October 1, 2020.

The adoption had no impact on the consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, which modifies the disclosure requirements for fair value measurements by removing, modifying or adding certain disclosures.

The Company adopted this standard effective October 1, 2020.

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 purposes of applying the fair value measurement alternative.

The Company adopted this guidance effective October 1, 2021.

The adoption did not have a material impact on the consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

Note 2—Acquisitions

Terminated Acquisition

On January 12, 2021, Visa and Plaid Inc.

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

See Note 13—Legal Matters .

Pending Acquisitions

Closed Acquisition

On December 20, 2021, Visa acquired The Currency Cloud Group Limited (“Currencycloud”), a UK-based global platform that enables banks and fintechs to provide innovative foreign exchange solutions for cross-border payments, for a total purchase consideration of $ 893 million (which includes the fair value of Visa’s previously held equity interest in Currencycloud).

As a result of this transaction closing days before the quarter-end, the initial allocation of the purchase price has not yet been completed.

On a provisional basis, the Company allocated $ 210 million to technology, intangible assets and deferred tax liabilities and $ 683 million to goodwill.

The Company expects to finalize the purchase price allocation once the information required to complete the accounting is available, but no later than one year from the acquisition date.

Pending Acquisition

On June 24, 2021, Visa entered into a definitive agreement to acquire Tink AB (“Tink”) for € 1.8 billion, inclusive of cash and retention incentives.

1 unchanged sentence

This acquisition is subject to customary closing conditions, including regulatory reviews and approvals.

On July 22, 2021, Visa entered into a definitive agreement to acquire The Currency Cloud Group Limited (“Currencycloud”), a UK-based global platform that enables banks and fintechs to provide innovative foreign exchange solutions for cross-border payments.

The acquisition values Currencycloud at £ 700 million, inclusive of cash and retention incentives.

The financial consideration will be reduced by the outstanding equity of Currencycloud that Visa already owns.

This acquisition is subject to customary closing conditions, including regulatory reviews and approvals.

Note 3—Revenues

The nature, amount, timing and uncertainty of the Company’s revenues and cash flows and how they are affected by economic factors are most appropriately depicted through the Company’s revenue categories and geographical markets.

The following tables disaggregate the Company’s net revenues by revenue category and by geography for the three and nine months ended June 30, 2021 and 2020:

The following tables disaggregate the Company’s net revenues by revenue category and by geography:

Three Months Ended

June 30, Nine Months Ended

2021 2020 2021 2020

(in millions)

5 unchanged sentences

Net revenues $ 7,059 $ 5,687

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

Three Months Ended

June 30, Nine Months Ended

2021 2020 2021 2020

(in millions)

2 unchanged sentences

Net revenues $ 7,059 $ 5,687

At June 30, 2021 and September 30, 2020, deferred revenue included in accrued liabilities on the consolidated balance sheets was $ 696 million and $ 533 million, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

Note 4—Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents

14 unchanged sentences

covered litigation” are paid.

The escrow funds are held in money market investments along with interest income earned, less applicable taxes, and are classified as restricted cash equivalents on the consolidated balance sheets.

The accrual related to the U.S.

2 unchanged sentences

See Note 13—Legal Matters .

The following table sets forth the changes in the restricted cash equivalents—U.S.

The following table presents the changes in the restricted cash equivalents—U.S.

litigation escrow account:

Nine Months Ended

Three Months Ended

(in millions)

Balance at beginning of period $ 894 $ 901

Return of takedown payment to the litigation escrow account — 467

Deposits into the litigation escrow account 250 —

Payments to opt-out merchants (1) and interest earned on escrow funds

( 7 ) ( 524 )

Balance at end of period $ 1,144 $ 894

1 unchanged sentence

See Note 13—Legal Matters .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

Europe Retrospective Responsibility Plan

Visa Inc., Visa International and Visa Europe are parties to certain existing and potential litigation relating to the setting of multilateral interchange fee rates in the Visa Europe territory (the “VE territory covered litigation”).

Under the terms of the Europe retrospective responsibility plan, the Company is entitled to recover certain losses resulting from VE territory covered litigation (the “VE territory covered losses”) through a periodic adjustment to the class A common stock conversion rates applicable to the UK&I and Europe preferred stock.

VE territory covered losses are recorded in “right to recover for covered losses” within stockholders’ equity before the corresponding adjustment to the applicable conversion rate is effected.

1 unchanged sentence

When the adjustment to the conversion rate is made, the amount previously recorded in “right to recover for covered losses” as contra-equity is then recorded against the book value of the preferred stock within stockholders’ equity.

During the three and nine months ended June 30, 2021, the Company recovered $ 40 million and $ 55 million, respectively, of VE territory covered losses through adjustments to the class A common stock conversion rates applicable to the UK&I and Europe preferred stock.

The following table sets forth the activities related to VE territory covered losses in preferred stock and “right to recover for covered losses” within stockholders’ equity during the nine months ended June 30, 2021:

During the three months ended December 31, 2021, the Company recovered $ 29 million of VE territory covered losses through adjustments to the class A common stock conversion rates applicable to the series B and C preferred stock.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

The following table presents the activities related to VE territory covered losses in preferred stock and “right to recover for covered losses” within stockholders’ equity:

Preferred Stock Right to Recover for Covered Losses

Series B Series C

(in millions)

2 unchanged sentences

Recovery through conversion rate adjustment ( 26 ) ( 3 ) 29

( 35 ) ( 20 ) 53

Balance as of June 30, 2021 $ 1,071 $ 1,523 $ ( 24 )

Balance as of December 31, 2021 $ 1,045 $ 1,520 $ ( 111 )

Preferred Stock Right to Recover for Covered Losses

Series B Series C

(in millions)

Balance as of September 30, 2020 $ 1,106 $ 1,543 $ ( 39 )

VE territory covered losses incurred (1)

Recovery through conversion rate adjustment ( 9 ) ( 6 ) 15

Balance as of December 31, 2020 $ 1,097 $ 1,537 $ ( 34 )

(1) VE territory covered losses incurred reflect settlements with merchants and additional legal costs.

See Note 13—Legal Matters .

(2) Adjustment to right to recover for covered losses for the conversion rate adjustment differs from the actual recovered amount due to differences in foreign exchange rates between the time the losses were incurred and the subsequent recovery through the conversion rate adjustment.

The following table sets forth the as-converted value of the preferred stock available to recover VE territory covered losses compared to the book value of preferred stock recorded in stockholders’ equity within the Company’s consolidated balance sheets as of June 30, 2021 and September 30, 2020:

June 30, 2021 September 30, 2020

The following table presents the as-converted value of the preferred stock available to recover VE territory covered losses compared to the book value of preferred stock recorded in stockholders’ equity within the Company’s consolidated balance sheets:

December 31, 2021 September 30, 2021

As-converted Value of Preferred Stock (1),(2)

3 unchanged sentences

(in millions)

UK&I preferred stock $ 3,666 $ 1,071 $ 3,168 $ 1,106

Europe preferred stock 5,044 1,523 4,331 1,543

Series B preferred stock $ 3,371 $ 1,045 $ 3,493 $ 1,071

Series C preferred stock 4,672 1,520 4,806 1,523

Total 8,043 2,565 8,299 2,594

3 unchanged sentences

As-converted and book values are based on unrounded numbers.

(2) As of June 30, 2021, the as-converted value of preferred stock is calculated as the product of:

(a) 2 million and 3 million shares of the UK&I and Europe preferred stock outstanding, respectively;

(b) 6.321 and 6.834 , the class A common stock conversion rate applicable to the UK&I and Europe preferred stock, respectively;

(2) As of December 31, 2021, the as-converted value of preferred stock is calculated as the product of:

(a) 2 million and 3 million shares of the series B and C preferred stock outstanding, respectively;

(b) 6.271 and 6.829 , the class A common stock conversion rate applicable to the series B and C preferred stock outstanding, respectively;

and (c) $ 216.71 , Visa’s class A common stock closing stock price.

(3) As of September 30, 2021, the as-converted value of preferred stock is calculated as the product of:

(a) 2 million and 3 million shares of the UK&I and Europe preferred stock outstanding, respectively;

(b) 6.387 and 6.861 , the class A common stock conversion rate applicable to the UK&I and Europe preferred stock respectively;

(a) 2 million and 3 million shares of the series B and C preferred stock outstanding, respectively;

(b) 6.321 and 6.834 , the class A common stock conversion rate applicable to the series B and C preferred stock outstanding, respectively;

and (c) $ 222.75 , Visa’s class A common stock closing stock price.

6 unchanged sentences

2021 September 30,

2020 June 30,

2021 December 31,

2021 September 30,

4 unchanged sentences

government-sponsored debt securities

— — 600 1,469

Treasury securities

1,075 2,400 — —

Investment securities:

1 unchanged sentence

government-sponsored debt securities

— — 486 2,582

Treasury securities

10 unchanged sentences

Total $ 209 $ 167 $ 62 $ 109

Level 1 assets.

Level 1 assets and liabilities.

Money market funds, marketable equity securities and U.S.

7 unchanged sentences

Treasury securities.

As of June 30, 2021 and September 30, 2020, the Company held $ 1.8 billion and $ 3.8 billion of these available-for-sale investment securities, respectively.

All of the Company’s long-term available-for-sale investment securities are due within one to five years .

As of December 31, 2021 and September 30, 2021, gross unrealized gains and losses were not material.

As of December 31, 2021, $ 2.3 billion of the Company’s debt securities are due within one year and $ 2.1 billion is due between one to five years.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

3 unchanged sentences

These investments are classified as Level 3 due to the absence of quoted market prices, the inherent lack of liquidity and the fact that inputs used to measure fair value are unobservable and require management’s judgment.

The following table summarizes the total carrying value of the Company’s non-marketable equity securities held as of June 30, 2021 including cumulative unrealized gains and losses:

The following table summarizes the total carrying value of the Company’s non-marketable equity securities held as of December 31, 2021 including cumulative unrealized gains and losses:

(in millions)

3 unchanged sentences

Carrying amount, end of period $ 1,698

During the three and nine months ended June 30, 2021 and 2020, unrealized gains and losses included in the carrying value of the Company’s non-marketable equity securities still held as of June 30, 2021 and 2020 were as follows:

Unrealized gains and losses included in the carrying value of the Company’s non-marketable equity securities still held as of December 31, 2021 and 2020 were as follows:

Three Months Ended

June 30, Nine Months Ended

2021 2020 2021 2020

(in millions)

1 unchanged sentence

Downward adjustments (including impairment) $ — $ ( 2 )

The Company recognized net unrealized gains on marketable and non-marketable equity securities still held as of quarter end of $ 434 million and $ 68 million for the three months ended June 30, 2021 and 2020, respectively, and $ 610 million and $ 59 million for the nine months ended June 30, 2021 and 2020, respectively.

The Company recognized net unrealized gains on marketable and non-marketable equity securities still held as of quarter end of $ 172 million and $ 29 million for the three months ended December 31, 2021 and 2020, respectively.

Non-financial assets and liabilities.

Long-lived assets such as goodwill, indefinite-lived intangible assets, finite-lived intangible assets and property, equipment and technology are considered non-financial assets.

The Company does not have any non-financial liabilities measured at fair value on a non-recurring basis.

Finite-lived intangible assets primarily consist of customer relationships and trade names, all of which were obtained through acquisitions.

If the Company were required to perform a quantitative assessment for impairment testing of goodwill and indefinite-lived intangible assets, the fair values would generally be estimated using an income approach.

As the assumptions employed to measure these assets on a non-recurring basis are based on management’s judgment using internal and external data, these fair value determinations are classified as Level 3 in the fair value hierarchy.

The Company completed its annual impairment review of its indefinite-lived intangible assets and goodwill as of February 1, 2021, and concluded that there was no impairment.

No recent events or changes in circumstances indicate that impairment existed at June 30, 2021.

Certain non-financial assets such as goodwill, intangible assets and property, equipment and technology are only recognized at fair value if they are deemed to be impaired.

As of December 31, 2021, there were no impairment indicators.

Other Fair Value Disclosures

2 unchanged sentences

If measured at fair value in the financial statements, these instruments would be classified as Level 2 in the fair value hierarchy.

As of June 30, 2021, the carrying value and estimated fair value of debt was $ 21.0 billion and $ 22.9 billion, respectively.

As of December 31, 2021, the carrying value and estimated fair value of debt was $ 20.9 billion and $ 22.5 billion, respectively.

As of September 30, 2021, the carrying value and estimated fair value of debt was $ 21.0 billion and $ 22.5 billion, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

Other financial instruments not measured at fair value.

The following financial instruments are not measured at fair value on the Company’s unaudited consolidated balance sheet at June 30, 2021, but disclosure of their fair values is required:

settlement receivable and payable and customer collateral.

The estimated fair value of such instruments at June 30, 2021 approximates their carrying value due to their generally short maturities.

At December 31, 2021, the carrying value of settlement receivable and payable and customer collateral approximates fair value due to their generally short maturities.

If measured at fair value in the financial statements, these financial instruments would be classified as Level 2 in the fair value hierarchy.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

The Company had outstanding debt as follows:

2 unchanged sentences

(in millions, except percentages)

2.20 % Senior Notes due December 2020

$ — $ 3,000 2.30 %

2.15 % Senior Notes due September 2022

34 unchanged sentences

(1) Effective interest rates disclosed do not reflect hedge accounting adjustments.

(2) Represents the change in fair value of interest rate swap agreements entered into on a portion of outstanding senior notes.

During the nine months ended June 30, 2021, the Company repaid $ 3.0 billion of principal upon maturity of its senior notes due December 14, 2020.

(2) Represents the change in fair value of interest rate swap agreements entered into on a portion of the outstanding senior notes.

Note 8—Settlement Guarantee Management

1 unchanged sentence

This indemnification creates settlement risk for the Company due to the difference in timing between the date of a payment transaction and the date of subsequent settlement.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

Historically, the Company has experienced minimal losses as a result of its settlement risk guarantee.

1 unchanged sentence

The Company’s settlement exposure is limited to the amount of unsettled Visa payment transactions at any point in time, which vary significantly day to day.

During the nine months ended June 30, 2021, the Company’s maximum daily settlement exposure was $ 104.1 billion and the average daily settlement exposure was $ 63.9 billion.

During the three months ended December 31, 2021, the Company’s maximum daily settlement exposure was $ 112.7 billion and the average daily settlement exposure was $ 72.4 billion.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

The Company maintains and regularly reviews global settlement risk policies and procedures to manage settlement exposure, which may require clients to post collateral if certain credit standards are not met.

At June 30, 2021 and September 30, 2020, the Company held the following collateral to manage settlement exposure:

The Company held the following collateral to manage settlement exposure:

2021 September 30,

8 unchanged sentences

The number of shares of each series and class, and the number of shares of class A common stock on an as-converted basis were as follows:

June 30, 2021 September 30, 2020

December 31, 2021 September 30, 2021

Outstanding Conversion Rate Into

2 unchanged sentences

Common Stock As-converted Class A

(in millions, except conversion rates)

(in millions, except conversion rate)

Series A preferred stock — (2)

100.0000 6 — (2)

UK&I preferred stock 2 6.3210 16 2 6.3870 16

Europe preferred stock 3 6.8340 22 3 6.8610 22

Series B preferred stock 2 6.2710 16 2 6.3210 16

Series C preferred stock 3 6.8290 22 3 6.8340 22

Class A common stock (3)

7 unchanged sentences

(2) The number of shares outstanding was less than one million.

(3) Class A common stock shares outstanding reflect repurchases that settled on or before June 30, 2021 and September 30, 2020, respectively.

(3) Class A common stock shares outstanding reflect repurchases that settled on or before December 31, 2021 and September 30, 2021, respectively.

(4) The class B to class A common stock conversion rate is presented on a rounded basis.

1 unchanged sentence

Reduction in as-converted shares.

Under the terms of the Europe retrospective responsibility plan, the Company is entitled to recover VE territory covered losses through periodic adjustments to the class A common stock conversion rates applicable to the UK&I and Europe preferred stock.

The recovery has the same economic effect on earnings per share as repurchasing the Company’s class A common stock, because it reduces the UK&I and Europe preferred stock conversion rates and consequently, reduces the as-converted class A common stock share count.

Under the terms of the U.S.

retrospective responsibility plan, when the Company funds the U.S.

litigation escrow account, the value of the Company’s class B common stock is subject to dilution through a downward adjustment to the conversion rate of the shares of class B common stock to shares of class A common stock.

The deposit and recovery have the same economic effect on earnings per share as repurchasing the Company’s class A common stock, because it reduces the class B common stock and the series B and C preferred stock conversion rates and consequently, reduces the as-converted class A common stock share count.

See Note 5—U.S.

and Europe Retrospective Responsibility Plans .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

The following table presents the reduction in as-converted UK&I and Europe preferred stock after the Company recovered VE territory covered losses through conversion rate adjustments in the nine months ended June 30, 2021 and 2020:

Nine Months Ended

June 30, 2021 Nine Months Ended

June 30, 2020

UK&I Europe UK&I Europe

The following table presents the reduction in the number of as-converted class B common stock after deposit into the U.S.

litigation escrow account for the three months ended December 31, 2021.

There was no comparable adjustment recorded for class B common stock for the three months ended December 31, 2020.

Three Months Ended

December 31, 2021

(in millions, except per share data)

Reduction in equivalent number of as-converted shares of class A common stock — (1)

Reduction in equivalent number of class A common stock 1

Effective price per share (1)

Deposits under the U.S.

retrospective responsibility plan $ 250

(1) Effective price per share is calculated using the volume-weighted average price of the Company’s class A common stock over a pricing period in accordance with the Company’s current certificate of incorporation.

The following table presents the reduction in the number of as-converted series B and C preferred stock after the Company recovered VE territory covered losses through conversion rate adjustments:

Three Months Ended

December 31, 2021 Three Months Ended

December 31, 2020

Series B Series C Series B Series C

(in millions, except per share data)

Reduction in equivalent number of class A common stock — (1)

Effective price per share (2)

$ 201.68 $ 201.68 $ 209.89 $ 209.89

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(1) The reduction in equivalent number of shares of class A common stock was less than one million shares.

(2) Effective price per share for the quarter is calculated using the volume-weighted average price of the Company’s class A common stock over a pricing period in accordance with the Company’s current certificates of designations for its series B and C convertible participating preferred stock.

Effective price per share is calculated using the weighted-average effective prices of the respective adjustments made during the year.

Common stock repurchases.

The following table presents share repurchases in the open market for the following periods:

The following table presents share repurchases in the open market:

Three Months Ended

June 30, Nine Months Ended

2021 2020 2021 2020

(in millions, except per share data)

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$ 4,104 $ 1,796

(1) Shares repurchased in the open market reflect repurchases that settled during the three and nine months ended June 30, 2021 and 2020, respectively.

(1) Shares repurchased in the open market reflect repurchases that settled during the three months ended December 31, 2021 and 2020, respectively.

All shares repurchased in the open market have been retired and constitute authorized but unissued shares.

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

Average repurchase price per share and total cost is calculated based on unrounded numbers.

In January 2020, the Company’s board of directors authorized a $ 9.5 billion share repurchase program and in January 2021, authorized an additional $ 8.0 billion share repurchase program (the “January 2021 Program”).

Average repurchase price per share and total cost are calculated based on unrounded numbers.

In December 2021, the Company’s board of directors authorized a new $ 12.0 billion share repurchase program.

Previously, in January 2021, the Company’s board of directors authorized an $ 8.0 billion share repurchase program (the “January 2021 Program”).

These authorizations have no expiration date.

As of June 30, 2021, the Company’s repurchase program had remaining authorized funds of $ 7.8 billion.

As of December 31, 2021, the Company’s repurchase programs had remaining authorized funds of $ 12.7 billion.

All share repurchase programs authorized prior to the January 2021 Program have been completed.

On July 23, 2021, the Company’s board of directors declared a quarterly cash dividend 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 September 1, 2021, to all holders of record as of August 13, 2021.

The Company declared and paid dividends of $ 698 million and $ 663 million during the three months ended June 30, 2021 and 2020, respectively, and $ 2.1 billion and $ 2.0 billion during the nine months ended June 30, 2021 and 2020, respectively.

On January 25, 2022, the Company’s board of directors declared a quarterly cash dividend of $ 0.375 per share of class A common stock (determined in the case of class B and C common stock and series A, B and C preferred stock on an as-converted basis), which will be paid on March 1, 2022, to all holders of record as of February 11, 2022.

The Company declared and paid dividends of $ 809 million and $ 703 million during the three months ended December 31, 2021 and 2020, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

Note 10—Earnings Per Share

Basic earnings per share is computed by dividing net income available to each class of shares by the weighted-average number of shares of common stock outstanding and participating securities during the period.

Participating securities include the Company’s series A, B and C preferred stock and restricted stock units (“RSUs”) that contain non-forfeitable rights to dividends or dividend equivalents.

Net income is allocated to each class of common stock and participating securities based on its proportional ownership on an as-converted basis.

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See Note 9—Stockholders’ Equity .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

Diluted earnings per share is computed by dividing net income available by the weighted-average number of shares of common stock outstanding, participating securities and, if dilutive, potential class A common stock equivalent shares outstanding during the period.

Dilutive class A common stock equivalents may consist of:

(1) shares of class A common stock issuable upon the conversion of series A, UK&I and Europe preferred stock and class B and C common stock based on the conversion rates in effect through the period, and (2) incremental shares of class A common stock calculated by applying the treasury stock method to the assumed exercise of employee stock options, the assumed purchase of stock under the Company’s Employee Stock Purchase Plan and the assumed vesting of unearned performance shares.

The following table presents earnings per share for the three months ended June 30, 2021:

Basic Earnings Per Share Diluted Earnings Per Share

Outstanding (B) Earnings per

(in millions, except per share data)

Class A common stock $ 1,996 1,691 $ 1.18 $ 2,575 2,184 (3)

Class B common stock 470 245 $ 1.92 $ 470 245 $ 1.91

Class C common stock 49 10 $ 4.72 $ 49 10 $ 4.72

Participating securities (4)

60 Not presented Not presented $ 60 Not presented Not presented

Net income $ 2,575

The following table presents earnings per share for the nine months ended June 30, 2021:

Basic Earnings Per Share Diluted Earnings Per Share

Outstanding (B) Earnings per

(in millions, except per share data)

Class A common stock $ 6,748 1,693 $ 3.99 $ 8,727 2,192 (3)

Class B common stock 1,588 245 $ 6.47 $ 1,586 245 $ 6.46

Class C common stock 169 11 $ 15.94 $ 169 11 $ 15.92

Participating securities (4)

222 Not presented Not presented $ 221 Not presented Not presented

Net income $ 8,727

The following table presents earnings per share for the three months ended June 30, 2020:

(1) shares of class A common stock issuable upon the conversion of series A, B and C preferred stock and class B and C common stock based on the conversion rates in effect through the period, and (2) incremental shares of class A common stock calculated by applying the treasury stock method to the assumed exercise of employee stock options, the assumed purchase of stock under the Company’s Employee Stock Purchase Plan and the assumed vesting of unearned performance shares.

The following table presents earnings per share for the three months ended December 31, 2021:

Basic Earnings Per Share Diluted Earnings Per Share

8 unchanged sentences

Net income $ 3,959

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

The following table presents earnings per share for the nine months ended June 30, 2020:

The following table presents earnings per share for the three months ended December 31, 2020:

Basic Earnings Per Share Diluted Earnings Per Share

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Class C common stock 61 11 $ 5.69 $ 61 11 $ 5.68

Participating securities (4)

314 Not presented Not presented $ 314 Not presented Not presented

Participating securities 88 Not presented Not presented $ 89 Not presented Not presented

Net income $ 3,126

(1) Net income is allocated based on proportional ownership on an as-converted basis.

The weighted-average number of shares of as-converted class B common stock used in the income allocation was 398 million for the three and nine months ended June 30, 2021 and 2020.

The weighted-average number of shares of as-converted class C common stock used in the income allocation was 42 million for the three and nine months ended June 30, 2021 and 43 million and 44 million for the three and nine months ended June 30, 2020, respectively.

The weighted-average number of shares of preferred stock included within participating securities was 9 million and 14 million of as-converted series A preferred stock for the three and nine months ended June 30, 2021, respectively, 16 million and 32 million of as-converted UK&I preferred stock for the three and nine months ended June 30, 2021 and 2020, respectively, and 22 million and 44 million of as-converted Europe preferred stock for the three and nine months ended June 30, 2021 and 2020, respectively.

The weighted-average number of shares of as-converted class B common stock used in the income allocation was 398 million for the three months ended December 31, 2021 and 2020.

The weighted-average number of shares of as-converted class C common stock used in the income allocation was 40 million and 43 million for the three months ended December 31, 2021 and 2020, respectively.

The weighted-average number of shares of preferred stock included within participating securities was 7 million and 21 million of as-converted series A preferred stock for the three months ended December 31, 2021 and 2020, respectively, 16 million of as-converted series B preferred stock for the three months ended December 31, 2021 and 2020, and 22 million of as-converted series C preferred stock for the three months ended December 31, 2021 and 2020.

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

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(3) Weighted-average diluted shares outstanding are calculated on an as-converted basis and include incremental common stock equivalents, as calculated under the treasury stock method.

The computation includes common stock equivalents of 3 million for the three and nine months ended June 30, 2021 and 2020 because their effect would have been dilutive.

The computation excludes common stock equivalents of less than 1 million for the three and nine months ended June 30, 2021 and 1 million for the three and nine months ended June 30, 2020, because their effect would have been anti-dilutive.

(4) Participating securities include preferred stock outstanding and unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents, such as the Company’s series A preferred stock, UK&I and Europe preferred stock and restricted stock units.

Participating securities’ income is allocated based on the weighted-average number of shares of as-converted stock.

The common stock equivalents are not material for the three months ended December 31, 2021 and 2020.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

Note 11—Share-based Compensation

The Company granted the following equity awards to employees and non-employee directors under the 2007 Equity Incentive Compensation Plan, or the EIP, during the nine months ended June 30, 2021:

The Company granted the following equity awards to employees and non-employee directors under the 2007 Equity Incentive Compensation Plan, or the EIP, during the three months ended December 31, 2021:

Granted Weighted-Average Grant Date Fair Value Weighted-Average Exercise Price

4 unchanged sentences

(1) Represents the maximum number of performance-based shares which could be earned.

Related to the EIP, the Company recorded share-based compensation cost, net of estimated forfeitures, of $ 153 million and $ 102 million for the three months ended June 30, 2021 and 2020, respectively, and $ 417 million and $ 306 million for the nine months ended June 30, 2021 and 2020, respectively.

On January 26, 2021, the EIP was amended to extend the termination date from January 31, 2022 to January 26, 2031 and reduce the number of shares authorized for grant from 236 million to 198 million.

Additionally, shares available for grant may be either unissued or previously issued shares subsequently acquired by the Company, except that shares withheld for taxes, or shares used to pay the exercise or purchase price of an award, shall not again be available for future grant.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

Related to the EIP, the Company recorded share-based compensation cost, net of estimated forfeitures, of $ 121 million and $ 116 million for the three months ended December 31, 2021 and 2020, respectively.

Note 12—Income Taxes

The effective income tax rates were 41 % and 26 % for the three and nine months ended June 30, 2021, respectively, and 19 % for the three and nine months ended June 30, 2020.

The effective tax rates for the three and nine months ended June 30, 2021 differ from the effective tax rates for the same periods in the prior year primarily due to the following:

• during the three months ended June 30, 2021, a $ 1.0 billion non-recurring, non-cash tax expense related to the remeasurement of UK deferred tax liabilities, as discussed below;

• during the three months ended June 30, 2021, a $ 51 million tax benefit as a result of a tax position taken on certain expenses;

• during the nine months ended June 30, 2021, $ 147 million of tax benefits as a result of the conclusion of audits by taxing authorities.

On June 10, 2021, the UK enacted legislation that will increase the tax rate from 19% to 25%, effective April 1, 2023.

As a result, the Company recorded a non-recurring, non-cash tax expense related to the remeasurement of its net UK deferred tax liabilities, primarily related to intangibles recorded upon the acquisition of Visa Europe in fiscal 2016.

During the three months ended June 30, 2021, the Company’s gross and net unrecognized tax benefits increased by $ 80 million and $ 39 million, respectively.

During the nine months ended June 30, 2021, the Company’s gross and net unrecognized tax benefits decreased by $ 37 million and $ 137 million, respectively.

The change in unrecognized tax benefits is related to various tax positions across several jurisdictions.

Additionally, for the nine month period, the decrease in unrecognized tax benefits is primarily due to the recognition of previously unrecognized tax benefits as a result of the conclusion of audits by taxing authorities, partially offset by increases in gross timing differences.

During the three and nine months ended June 30, 2021, there were no significant changes in accrued interest related to uncertain tax positions.

During the three and nine months ended June 30, 2020, the Company’s accrued interest related to uncertain tax positions increased by $ 18 million and $ 56 million, respectively.

For the three months ended December 31, 2021 and 2020, the effective income tax rates were 19 % and 17 %, respectively.

The difference in the effective tax rates is 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.

During the three months ended December 31, 2021, the Company’s gross unrecognized tax benefits increased by $ 78 million, of which $ 29 million would favorably impact the effective tax rate, if recognized.

The change in unrecognized tax benefits is primarily related to various tax positions across several jurisdictions.

The Company’s tax filings are subject to examination by U.S.

2 unchanged sentences

It is not reasonably possible to estimate the increase or decrease in unrecognized tax benefits within the next twelve months.

In September 2020, the Company accepted a settlement offer related to the examination of Canadian tax returns dating back to fiscal 2003, which was subject to approval by the Tax Court of Canada.

On January 21, 2021, the Tax Court of Canada approved the settlement agreement related to the examination.

The Company’s income tax provision was adjusted to reflect the estimated impact of the settlement in fiscal 2020.

The American Rescue Plan Act of 2021 (the “ARP Act”) was enacted in the U.S.

on March 11, 2021.

The ARP Act is not expected to have a material impact on the Company’s financial results.

Note 13—Legal Matters

4 unchanged sentences

From time to time, the Company may engage in settlement discussions or mediations with respect to one or more of its outstanding litigation matters, either on its own behalf or collectively with other parties.

The litigation accrual is an estimate and is based on management’s understanding of the Company’s litigation profile, the specifics of each case, advice of counsel to the extent appropriate and management’s best estimate of incurred loss as of the balance sheet date.

The litigation accrual is an estimate and is based on management’s understanding of its litigation profile, the specifics of each case, advice of counsel to the extent appropriate and management’s best estimate of incurred loss as of the balance sheet date.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

The following table summarizes the activity related to accrued litigation:

Nine Months Ended

Three Months Ended

(in millions)

2 unchanged sentences

Provision for covered legal matters 146 10

Reestablishment of prior accrual related to interchange multidistrict litigation — 467

Payments for legal matters ( 103 ) ( 16 )

16 unchanged sentences

covered litigation:

Nine Months Ended

Three Months Ended

(in millions)

Balance at beginning of period $ 881 $ 888

Reestablishment of prior accrual related to interchange multidistrict litigation — 467

Provision for interchange multidistrict litigation 145 —

Payments for U.S.

1 unchanged sentence

Balance at end of period $ 1,026 $ 881

During the quarter ended December 31, 2021, the Company recorded an additional accrual of $ 145 million and deposited $ 250 million into the U.S.

litigation escrow account to address claims of certain merchants who opted out of the Amended Settlement Agreement.

covered litigation accrual balance is consistent with the Company’s estimate of its share of the lower end of a probable and reasonably estimable loss with respect to U.S.

covered litigation.

While this estimate is consistent with the Company’s view of the current status of the litigation, the probable and reasonably estimable loss or range of such loss could materially vary based on developments in the litigation.

The Company will continue to consider and reevaluate this estimate in light of the substantial uncertainties with respect to the litigation.

The Company is unable to estimate a potential loss or range of loss, if any, at trial if negotiated resolutions cannot be reached.

Accrual Summary—VE Territory Covered Litigation

2 unchanged sentences

retrospective responsibility plan, the Europe retrospective responsibility plan does not have an escrow account that is used to fund settlements or judgments.

The Company is entitled to recover VE territory covered losses through periodic adjustments to the conversion rates applicable to the UK&I preferred stock and Europe preferred stock.

The Company is entitled to recover VE territory covered losses through periodic adjustments to the conversion rates applicable to the series B and C preferred stock.

An accrual for the VE territory covered losses and a reduction to stockholders’ equity will be recorded when the loss is deemed to be probable and reasonably estimable.

3 unchanged sentences

The following table summarizes the accrual activity related to VE territory covered litigation:

Nine Months Ended

Three Months Ended

(in millions)

4 unchanged sentences

Covered Litigation

Interchange Multidistrict Litigation (MDL) – Putative Class Actions

On December 18, 2020, the plaintiffs purporting to act on behalf of the putative Injunctive Relief Class moved for class certification.

On April 28, 2021, a complaint was filed by Hayley Lanning and others, and on June 16, 2021, a complaint was filed by Camp Grounds Coffee and others, each against Visa and Mastercard on behalf of a purported class of merchants located in 25 states and the District of Columbia who have taken payment using the Square card acceptance service.

The complaints allege violations of the antitrust laws of those jurisdictions and seek recovery for plaintiffs as indirect purchasers.

To the extent that those plaintiffs’ claims are not released by the Amended Settlement Agreement, Visa believes they are covered by the U.S.

Retrospective Responsibility Plan.

Interchange Multidistrict Litigation (MDL) - Individual Merchant Actions

4 unchanged sentences

and other Visa subsidiaries in the UK, Belgium and Poland primarily relating to interchange rates in Europe and in some cases relating to fees charged by Visa and certain Visa rules.

As of the filing date, Visa Europe, Visa Inc.

and other Visa subsidiaries have settled the claims asserted by over 100 Merchants, leaving more than 550 Merchants with outstanding claims.

As of the filing date, Visa has settled the claims asserted by over 150 Merchants, leaving more than 650 Merchants with outstanding claims.

In addition, over 30 additional Merchants have threatened to commence similar proceedings.

Standstill agreements have been entered into with respect to some of those threatened Merchant claims, several of which have been settled.

With regard to the claim asserted by one Merchant, trial before the UK Competition Appeal Tribunal to determine the lawful amount, if any, the plaintiff may be entitled to recover is set for June 2022.

Other plaintiffs, whose claims were effectively stayed pending the Supreme Court of the United Kingdom's judgment, are moving their claims forward, mostly before the UK Competition Appeal Tribunal.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

On November 26, 2021, with respect to certain pending Merchant claims, the UK Competition Appeal Tribunal (CAT) found that UK and certain other domestic and intra-European Economic Area consumer interchange fees before the introduction of the Interchange Fee Regulation (IFR) were a restriction of competition, but that the question of whether those fees are a restriction of competition after the introduction of the IFR would need to be resolved at trial.

Whether any interchange fees are exempt from the finding of restriction under applicable law and the assessment of damages, if any, will also need to be considered at trial.

Other Litigation

Canadian Merchant Litigation

All defendants have settled with the plaintiffs.

The appeals by Wal-Mart Canada and/or Home Depot of Canada Inc.

of the decisions approving the Visa and Mastercard settlements have been rejected in all five provinces.

Wal-Mart Canada and Home Depot of Canada Inc.

sought leave to appeal the British Columbia, Quebec, Ontario and Saskatchewan Courts of Appeal decisions to the Supreme Court of Canada, and those applications were denied.

Wal-Mart Canada and Home Depot of Canada Inc.

chose not to appeal the Alberta Court of Appeal decision to the Supreme Court of Canada, and the Visa and Mastercard settlements are now final.

EMV Chip Liability Shift

On January 19, 2021, the U.S.

Court of Appeals for the Second Circuit denied defendants’ request to appeal the district court’s decision granting plaintiffs’ motion for class certification.

Australian Competition and Consumer Commission

On March 9, 2021, the Australian Competition and Consumer Commission accepted an undertaking by Visa to resolve the investigation.

The investigation is now closed.

Euronet Litigation

In the claim by Euronet 360 Finance Limited, Euronet Polska Spolka z.o.o.

and Euronet Services spol.

s.r.o., trial has been scheduled for a date on or after October 2, 2023.

On January 12, 2021, the case filed by the U.S.

Department of Justice against Visa and Plaid was dismissed.

German ATM Litigation

In December 2020 and January 2021, six savings banks and cooperative banks filed claims in Germany against Visa Europe challenging Visa’s ATM rules prohibiting the charging of access fees on domestic cash withdrawals with a credit card as anti-competitive.

No damages are currently sought.

On December 24, 2020, 275 German savings banks initiated conciliation proceedings against Visa Europe, Visa Europe Services, LLC., and Visa Europe Services, Inc.

asserting claims related to the same rules.

Visa declined participation in these proceedings on March 22, 2021.

On April 30, 2021, Visa filed defenses challenging the jurisdiction of the German courts to hear claims brought by certain banks.

Department of Justice Civil Investigative Demand (2021)

On March 26, 2021, the Antitrust Division of the U.S.

Department of Justice (the “Division”) issued a Civil Investigative Demand (“CID”) to Visa seeking documents and information regarding a potential violation of Section 1 or 2 of the Sherman Act, 15 U.S.C.

The CID focuses on U.S.

debit and competition with other payment methods and networks.

Visa is cooperating with the Division in connection with the CID.

On June 11, 2021, the Division issued a further CID seeking additional documents and information on the same subjects.

In December 2021 and January 2022, Visa was served with claims in Germany brought by German savings banks against Visa Europe and Visa Inc.

The banks claim that Visa’s ATM rules prohibiting the charging of access fees on domestic cash withdrawals are anti-competitive and they are seeking damages.

Foreign Currency Exchange Rate Litigation

On July 9, 2021, a class action complaint was filed against Visa in the U.S.

District Court for the Northern District of California by several individuals on behalf of a nationwide class, and/or California, Washington, or Illinois subclasses, of cardholders who made a transaction in a foreign currency.

The complaint alleges that Visa sets foreign exchange rates in violation of Visa’s rules and bank cardholder agreements, and asserts claims for unjust enrichment and restitution as well as violations of the California Unfair Competition Law, the Washington Consumer Protection Act, and the Illinois Consumer Fraud Act.

Plaintiffs seek an injunction, damages, disgorgement, and attorneys’ fees among other relief.

On December 6, 2021, an amended complaint making similar allegations regarding the setting of foreign exchange rates was filed by several individuals on behalf of a nationwide class, and/or California, Washington, Massachusetts or New Jersey subclasses, of cardholders who made a transaction in a foreign currency.

The amended complaint asserts claims for unjust enrichment and restitution as well as violations of the California Unfair Competition Law, the Washington Consumer Protection Act, the Massachusetts Consumer Protection Act, and the New Jersey Consumer Fraud Act.

On January 19, 2022, Visa filed a motion to dismiss the amended complaint.

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 1. Financial Statements