What changed in this filing

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Item 1. Financial Statements

2022-04-28 compared with 2022-01-28 · 212 added, 86 removed, 628 unchanged (32% 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 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

Series A convertible participating preferred stock, less than one shares issued and outstanding at March 31, 2022 and September 30, 2021 (the “series A preferred stock”)

Series B convertible participating preferred stock, 2 shares issued and outstanding at March 31, 2022 and September 30, 2021 (the “series B preferred stock”)

Series C convertible participating preferred stock, 3 shares issued and outstanding at March 31, 2022 and September 30, 2021 (the “series C preferred stock”)

Class A common stock, $ 0.0001 par value, 2,001,622 shares authorized, 1,648 and 1,677 shares issued and outstanding at March 31, 2022 and September 30, 2021 respectively

Class B common stock, $ 0.0001 par value, 622 shares authorized, 245 shares issued and outstanding at March 31, 2022 and September 30, 2021

Class C common stock, $ 0.0001 par value, 1,097 shares authorized, 10 shares issued and outstanding at March 31, 2022 and September 30, 2021

Right to recover for covered losses ( 120 ) ( 133 )

12 unchanged sentences

Three Months Ended

March 31, Six Months Ended

2022 2021 2022 2021

(in millions, except per share data)

36 unchanged sentences

Three Months Ended

March 31, Six Months Ended

2022 2021 2022 2021

(in millions)

6 unchanged sentences

Net unrealized actuarial gain (loss) and prior service credit (cost)

( 2 ) ( 2 ) ( 1 ) ( 3 )

Income tax effect — 1 — 2

11 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Three Months Ended December 31, 2021

Three Months Ended March 31, 2022

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

(in millions, except per share data)

Balance as of December 31, 2021 — (1)

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

Net income 3,647 3,647

Other comprehensive income (loss), net of tax

( 333 ) ( 333 )

Comprehensive income 3,314

VE territory covered losses incurred ( 9 ) ( 9 )

Conversion of series A preferred stock upon sales into public market — (1)

Conversion of class C common stock upon sales into public market

Share-based compensation, net of forfeitures 190 190

Vesting of restricted stock and performance-based shares

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

Cash proceeds from issuance of class A common stock under employee equity plans 2 54 54

Cash dividends declared and paid, at a quarterly amount of $ 0.375 per class A common stock

( 802 ) ( 802 )

Repurchase of class A common stock ( 15 ) ( 149 ) ( 2,800 ) ( 2,949 )

Balance as of March 31, 2022 — (1)

2 3 1,648 245 10 $ 2,987 $ ( 120 ) $ 18,876 $ 14,651 $ ( 405 ) $ 35,989

(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)

Six Months Ended March 31, 2022

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

Paid-In Capital Accumulated

Income Accumulated

Comprehensive

Income (Loss), Net Total

A Series B Series C Class A Class B Class C

19 unchanged sentences

Repurchase of class A common stock ( 34 ) ( 358 ) ( 6,695 ) ( 7,053 )

Balance as of March 31, 2022 — (1)

2 3 1,648 245 10 $ 2,987 $ ( 120 ) $ 18,876 $ 14,651 $ ( 405 ) $ 35,989

(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 March 31, 2021

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

Paid-In Capital Accumulated

Income Accumulated

Comprehensive

Income (Loss), Net Total

A Series B Series C Class A Class B Class C

(in millions, except per share data)

Balance as of December 31, 2020 — (1)

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

Net income 3,026 3,026

Other comprehensive income (loss), net of tax

( 782 ) ( 782 )

Comprehensive income 2,244

VE territory covered losses incurred ( 7 ) ( 7 )

Conversion of series A preferred stock upon sales into public market — (1)

5 ( 336 ) 336 —

Conversion of class C common stock upon sales into public market

Share-based compensation, net of forfeitures 153 153

Vesting of restricted stock and performance-based shares

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

Cash proceeds from issuance of class A common stock under employee equity plans 1 47 47

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

( 701 ) ( 701 )

Repurchase of class A common stock ( 8 ) ( 88 ) ( 1,625 ) ( 1,713 )

Balance as of March 31, 2021 — (1)

2 3 1,694 245 11 $ 3,347 $ ( 41 ) $ 18,505 $ 15,513 $ 372 $ 37,696

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

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—(Continued)

Three Months Ended December 31, 2020

Six Months Ended March 31, 2021

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

24 unchanged sentences

Repurchase of class A common stock ( 17 ) ( 183 ) ( 3,326 ) ( 3,509 )

Balance as of December 31, 2020 — (1)

Balance as of March 31, 2021 — (1)

2 3 1,694 245 11 $ 3,347 $ ( 41 ) $ 18,505 $ 15,513 $ 372 $ 37,696

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Six Months Ended

(in millions)

24 unchanged sentences

Proceeds from maturities and sales 1,975 3,871

Acquisitions, net of cash acquired ( 832 ) ( 75 )

Acquisitions, net of cash and restricted cash acquired ( 1,945 ) ( 75 )

Purchases of / contributions to other investments ( 55 ) ( 30 )

5 unchanged sentences

Dividends paid ( 1,611 ) ( 1,404 )

Proceeds from issuance of commercial paper 300 —

Cash proceeds from issuance of class A common stock under employee equity plans 113 108

24 unchanged sentences

All significant intercompany accounts and transactions are eliminated in consolidation.

The accompanying unaudited consolidated financial statements are presented in accordance with the U.S.

During the quarter ended March 31, 2022, economic sanctions were imposed on Russia, impacting Visa and its clients.

The extent and severity of the sanctions impacted the Company’s operations and a reduction in Ruble liquidity impacted the Company’s ability to manage operational impact and related foreign currency risk.

In March 2022, the Company announced it was suspending its operations in Russia.

In addition, the Company deconsolidated its Russian subsidiary, resulting in a pre-tax loss of $ 35 million, which is included in general and administrative expense on the consolidated statements of operations.

The accompanying unaudited consolidated financial statements are presented in accordance with U.S.

Securities and Exchange Commission (“SEC”) requirements for Quarterly Reports on Form 10-Q and, consequently, do not include all of the annual disclosures required by U.S.

8 unchanged sentences

Future actual results could differ materially from these estimates.

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

2 unchanged sentences

The adoption did not have a material impact on the 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 purposes of applying the fair value measurement alternative.

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

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

Closed Acquisition

Currencycloud

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.

Tink is a European open banking platform that enables financial institutions, fintechs and merchants to build tailored financial management tools, products and services for European consumers and businesses based on their financial data.

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

The Company allocated $ 150 million of the purchase consideration to technology, intangible assets, other net assets acquired and deferred tax liabilities and the remaining $ 743 million to goodwill.

On March 10, 2022, Visa acquired 100 % of the share capital of Tink AB (“Tink”) for $ 1.9 billion in cash.

Tink is a European open banking platform that enables financial institutions, fintechs and merchants to build financial products and services and move money.

The acquisition is expected to help accelerate the adoption of open banking around the world by providing a secure, reliable platform for innovation.

Total purchase consideration has been allocated to the assets acquired and liabilities assumed and is subject to revision.

If additional information becomes available, the Company may further revise the purchase price allocation as soon as practicable, but no later than one year from the acquisition date;

however, at this time, material changes are not expected.

The following table summarizes the purchase price allocation for Tink:

Purchase Price Allocation Weighted-Average Useful Life

(in millions) (in years)

Technology $ 245 4

Customer relationships 90 6

Deferred tax liabilities ( 71 )

Other net assets acquired (liabilities assumed) 22

Goodwill 1,577

Total $ 1,863 5

Goodwill is primarily attributable to synergies expected to be achieved from the acquisition and the assembled workforce.

None of the goodwill recognized is expected to be deductible for tax purposes.

The Company did not include Tink's financial results in the Company's consolidated statements of operations from the acquisition date, March 10, 2022, through March 31, 2022, as the impact is not material to the Company’s financial results.

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

Note 3—Revenues

2 unchanged sentences

Three Months Ended

March 31, Six Months Ended

2022 2021 2022 2021

(in millions)

6 unchanged sentences

Three Months Ended

March 31, Six Months Ended

2022 2021 2022 2021

(in millions)

2 unchanged sentences

Net revenues $ 7,189 $ 5,729 $ 14,248 $ 11,416

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

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

9 unchanged sentences

$ 16,516 $ 19,799

Prepaid expenses and other current assets include restricted cash and restricted cash equivalents related to funds held by the Company, primarily from Currencycloud, on behalf of clients in segregated bank accounts that cannot be withdrawn or used for general operating activities.

These amounts are fully offset by corresponding liabilities recorded in accrued liabilities on the Company’s unaudited consolidated balance sheets.

and Europe Retrospective Responsibility Plans

7 unchanged sentences

See Note 13—Legal Matters .

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

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

litigation escrow account:

Three Months Ended

Six Months Ended

(in millions)

2 unchanged sentences

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

( 262 ) ( 7 )

Balance at end of period $ 882 $ 894

7 unchanged sentences

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 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:

5 unchanged sentences

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

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

Balance as of March 31, 2022 $ 1,045 $ 1,520 $ ( 120 )

Preferred Stock Right to Recover for Covered Losses

4 unchanged sentences

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

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

Balance as of March 31, 2021 $ 1,097 $ 1,537 $ ( 41 )

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

See Note 13—Legal Matters .

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

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

March 31, 2022 September 30, 2021

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

10 unchanged sentences

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

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

(2) As of March 31, 2022, 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;

12 unchanged sentences

2022 September 30,

2021 December 31,

2021 March 31,

2022 September 30,

23 unchanged sentences

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

Treasury securities are classified as Level 1 within the fair value hierarchy, as fair value is based on unadjusted quoted prices in active markets for identical assets and liabilities.

Treasury securities are classified as Level 1 within the fair value hierarchy, as fair value is based on unadjusted quoted prices in active markets for identical assets.

The Company’s deferred compensation liability is measured at fair value based on marketable equity securities held under the deferred compensation plan.

5 unchanged sentences

Treasury securities.

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.

As of March 31, 2022 and September 30, 2021, gross unrealized gains and losses were not material.

As of March 31, 2022, $ 1.5 billion of the Company’s debt securities are due within one year and $ 2.3 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 December 31, 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 March 31, 2022 including cumulative unrealized gains and losses:

(in millions)

3 unchanged sentences

Carrying amount, end of period $ 1,648

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:

Unrealized gains and losses included in the carrying value of the Company’s non-marketable equity securities still held as of March 31, 2022 and 2021 were as follows:

Three Months Ended

March 31, Six Months Ended

2022 2021 2022 2021

(in millions)

1 unchanged sentence

Downward adjustments (including impairment) $ ( 53 ) $ — $ ( 53 ) $ ( 2 )

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.

For the three months ended March 31, 2022 and 2021, the Company recognized net unrealized losses of $ 156 million, and net unrealized gains of $ 147 million, respectively, on marketable and non-marketable equity securities still held as of quarter end.

For the six months ended March 31, 2022 and 2021, the Company recognized net unrealized gains of $ 16 million and $ 176 million, respectively, on marketable and non-marketable equity securities still held as of quarter end.

Non-financial assets and liabilities.

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.

The Company performed its annual impairment review of its indefinite-lived intangible assets and goodwill as of February 1, 2022, and concluded there was no impairment as of that date.

As of March 31, 2022, 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 December 31, 2021, the carrying value and estimated fair value of debt was $ 20.9 billion and $ 22.5 billion, respectively.

As of March 31, 2022, the carrying value and estimated fair value of debt was $ 20.7 billion and $ 20.8 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.

Other financial instruments not measured at fair value.

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

At March 31, 2022, the carrying value of settlement receivable and payable, commercial paper 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.

4 unchanged sentences

(in millions, except percentages)

Commercial paper

$ 300 $ — 0.35 %

2.15 % Senior Notes due September 2022

35 unchanged sentences

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

Commercial Paper Program

Visa maintains a commercial paper program to support its working capital requirements and for other general corporate purposes.

Under the program, the Company is authorized to issue up to $ 3.0 billion in outstanding notes, with maturities up to 397 days from the date of issuance.

The commercial paper outstanding as of March 31, 2022 was fully repaid in April 2022.

Subsequent to March 31, 2022, the Company issued $ 650 million of commercial paper that was also fully repaid in April 2022.

Note 8—Settlement Guarantee Management

3 unchanged sentences

However, the Company’s future obligations, which could be material under its guarantees, are not determinable as they are dependent upon future events.

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 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’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 six months ended March 31, 2022, the Company’s maximum daily settlement exposure was $ 112.7 billion and the average daily settlement exposure was $ 71.3 billion.

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.

10 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:

December 31, 2021 September 30, 2021

March 31, 2022 September 30, 2021

Outstanding Conversion Rate Into

16 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 December 31, 2021 and September 30, 2021, respectively.

(3) Class A common stock shares outstanding reflect repurchases that settled on or before March 31, 2022 and September 30, 2021, respectively.

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

10 unchanged sentences

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

litigation escrow account for the six months ended March 31, 2022.

There was no comparable adjustment recorded for class B common stock for the six months ended March 31, 2021.

Six Months Ended

March 31, 2022

(in millions, except per share data)

5 unchanged sentences

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

Six Months Ended

March 31, 2022 Six Months Ended

March 31, 2021

Series B Series C Series B Series C

7 unchanged sentences

(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 preferred stock.

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

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

Common stock repurchases.

1 unchanged sentence

Three Months Ended

March 31, Six Months Ended

2022 2021 2022 2021

(in millions, except per share data)

4 unchanged sentences

$ 2,949 $ 1,713 $ 7,053 $ 3,509

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

(1) Shares repurchased in the open market reflect repurchases that settled during the three and six months ended March 31, 2022 and 2021, respectively.

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

1 unchanged sentence

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”).

In December 2021, the Company’s board of directors authorized a $ 12.0 billion share repurchase program (the “December 2021 Program”).

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

These authorizations have no expiration date.

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 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.

As of March 31, 2022, the Company’s repurchase program had remaining authorized funds of $ 9.8 billion.

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

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

The Company declared and paid dividends of $ 802 million and $ 701 million during the three months ended March 31, 2022 and 2021, respectively, and $ 1.6 billion and $ 1.4 billion during the six months ended March 31, 2022 and 2021, respectively.

On April 22, 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 June 1, 2022, to all holders of record as of May 13, 2022.

Note 10—Earnings Per Share

7 unchanged sentences

(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:

The following table presents earnings per share for the three months ended March 31, 2022:

Basic Earnings Per Share Diluted Earnings Per Share

5 unchanged sentences

Class C common stock 69 10 $ 6.82 $ 69 10 $ 6.81

Participating securities (4)

88 Not presented Not presented $ 88 Not presented Not presented

Participating securities 82 Not presented Not presented $ 81 Not presented Not presented

Net income $ 3,647

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

The following table presents earnings per share for the six months ended March 31, 2022:

Basic Earnings Per Share Diluted Earnings Per Share

7 unchanged sentences

Net income $ 7,606

(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 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.

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

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

Basic Earnings Per Share Diluted Earnings Per Share

Outstanding (B) Earnings per

(in millions, except per share data)

Class A common stock $ 2,342 1,695 $ 1.38 $ 3,026 2,193 (3)

Class B common stock 550 245 $ 2.24 $ 550 245 $ 2.24

Class C common stock 59 11 $ 5.52 $ 59 11 $ 5.52

Participating securities 75 Not presented Not presented $ 74 Not presented Not presented

Net income $ 3,026

The following table presents earnings per share for the six months ended March 31, 2021:

Basic Earnings Per Share Diluted Earnings Per Share

Outstanding (B) Earnings per

(in millions, except per share data)

Class A common stock $ 4,752 1,695 $ 2.80 $ 6,152 2,196 (3)

Class B common stock 1,117 245 $ 4.55 $ 1,116 245 $ 4.54

Class C common stock 120 11 $ 11.22 $ 120 11 $ 11.20

Participating securities 163 Not presented Not presented $ 163 Not presented Not presented

Net income $ 6,152

(1) The weighted-average number of shares of as-converted class B common stock used in the income allocation was 397 million for the three months ended March 31, 2022 and 398 million for the six month ended March 31, 2022 and three and six months ended March 31, 2021.

The weighted-average number of shares of as-converted class C common stock used in the income allocation was 40 million for the three and six months ended March 31, 2022 and 43 million for the three and six months ended March 31, 2021.

The weighted-average number of shares of preferred stock included within participating securities was 6 million of as-converted series A preferred stock for the three and six months ended March 31, 2022 and 12 million and 17 million of as-converted series A preferred stock for the three and six months ended March 31, 2021, respectively, 16 million of as-converted series B preferred stock for the three and six months ended March 31, 2022 and 2021, and 22 million of as-converted series C preferred stock for the three and six months ended March 31, 2022 and 2021.

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

Earnings per share is calculated based on unrounded numbers.

Basic and diluted earnings per share is calculated based on unrounded numbers.

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

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

The common stock equivalents are not material for the three and six months ended March 31, 2022 and 2021.

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 three months ended December 31, 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 six months ended March 31, 2022:

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

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(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 $ 121 million and $ 116 million for the three months ended December 31, 2021 and 2020, respectively.

Related to the EIP, the Company recorded share-based compensation cost, net of estimated forfeitures, of $ 181 million and $ 148 million for the three months ended March 31, 2022 and 2021, respectively, and $ 302 million and $ 264 million for the six months ended March 31, 2022 and 2021, respectively.

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

Note 12—Income Taxes

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.

For the three and six months ended March 31, 2022, the effective income tax rates were 20 % and 19 %, respectively, and for the three and six months ended March 31, 2021, the effective income tax rates were 17 %.

The difference in the effective tax rates is primarily due to $ 66 million and $ 147 million of tax benefits recognized during the three and six months ended March 31, 2021, respectively, as a result of the conclusion of audits by taxing authorities.

During the three and six months ended March 31, 2022, the Company’s gross unrecognized tax benefits increased by $ 65 million and $ 143 million, respectively.

The Company’s net unrecognized tax benefits that, if recognized, would favorably impact the effective tax rate, increased by $ 17 million and $ 46 million, respectively.

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

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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:

Three Months Ended

Six Months Ended

(in millions)

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and Europe Retrospective Responsibility Plans.

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

The following table summarizes the accrual activity related to U.S.

covered litigation:

Three Months Ended

Six Months Ended

(in millions)

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Balance at end of period $ 764 $ 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.

During the six months ended March 31, 2022, 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.

During the six months ended March 31, 2022, the Company paid $ 262 million for U.S.

covered litigation.

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.

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and Europe Retrospective Responsibility Plans .

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

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

Three Months Ended

Six Months Ended

(in millions)

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Visa has reached settlements with a number of merchants representing approximately 50 % of the Visa-branded payment card sales volume of merchants who opted out of the Amended Settlement Agreement with the Damages Class plaintiffs.

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

VE Territory Covered Litigation

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Since July 2013, in excess of 850 Merchants (the capitalized term “Merchant,” when used in this section, means a merchant together with subsidiary/affiliate companies that are party to the same claim) have commenced proceedings against Visa Europe, Visa Inc.

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.

and other Visa subsidiaries in the UK, Belgium, Poland and Israel 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 has settled the claims asserted by over 150 Merchants, leaving more than 650 Merchants with outstanding claims.

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

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.

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, along with inter-European Economic Area 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.

On February 1, 2022, the UK Court of Appeal granted claimants permission to appeal the CAT’s ruling and an appeal hearing is scheduled for July 2022.

Other Litigation

Pulse Network

On April 5, 2022, the U.S.

Court of Appeals for the Fifth Circuit reversed, in part, the district court’s summary judgment decision in Visa's favor, finding that Pulse has standing to pursue certain of its claims, and remanded the case to the district court for further proceedings.

German ATM Litigation

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

Between December 2021 and March 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.

4 unchanged sentences

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