What changed in this filing

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Item 1. Financial Statements

2022-07-28 compared with 2022-04-28 · 133 added, 88 removed, 752 unchanged (23% 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 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

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

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

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

Class A common stock, $ 0.0001 par value, 2,001,622 shares authorized, 1,637 and 1,677 shares issued and outstanding at June 30, 2022 and September 30, 2021 respectively

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

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

Right to recover for covered losses ( 23 ) ( 133 )

12 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2022 2021 2022 2021

37 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2022 2021 2022 2021

5 unchanged sentences

Income tax effect 10 1 20 1

Reclassification adjustments — ( 1 ) — ( 1 )

Defined benefit pension and other postretirement plans:

14 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

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

5 unchanged sentences

(in millions, except per share data)

Balance as of December 31, 2021 — (1)

Balance as of March 31, 2022 — (1)

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

4 unchanged sentences

VE territory covered losses incurred ( 15 ) ( 15 )

Recovery through conversion rate adjustment ( 112 ) 112 —

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

7 unchanged sentences

Repurchase of class A common stock ( 12 ) ( 129 ) ( 2,304 ) ( 2,433 )

Balance as of March 31, 2022 — (1)

Balance as of June 30, 2022 — (1)

2 3 1,637 245 10 $ 2,851 $ ( 23 ) $ 18,962 $ 14,960 $ ( 1,267 ) $ 35,483

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—(Continued)

Six Months Ended March 31, 2022

Nine Months Ended June 30, 2022

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

24 unchanged sentences

Repurchase of class A common stock ( 46 ) ( 487 ) ( 8,999 ) ( 9,486 )

Balance as of March 31, 2022 — (1)

Balance as of June 30, 2022 — (1)

2 3 1,637 245 10 $ 2,851 $ ( 23 ) $ 18,962 $ 14,960 $ ( 1,267 ) $ 35,483

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—(Continued)

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

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

5 unchanged sentences

(in millions, except per share data)

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

1 unchanged sentence

Other comprehensive income (loss), net of tax

( 782 ) ( 782 )

Comprehensive income 2,804

VE territory covered losses incurred ( 21 ) ( 21 )

Recovery through conversion rate adjustment ( 40 ) 38 ( 2 )

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

8 unchanged sentences

Repurchase of class A common stock ( 10 ) ( 104 ) ( 2,096 ) ( 2,200 )

Balance as of March 31, 2021 — (1)

Balance as of June 30, 2021 — (1)

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

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—(Continued)

Six Months Ended March 31, 2021

Nine Months Ended June 30, 2021

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

24 unchanged sentences

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

Balance as of March 31, 2021 — (1)

Balance as of June 30, 2021 — (1)

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

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

Nine Months Ended

(in millions)

32 unchanged sentences

Dividends paid ( 2,409 ) ( 2,102 )

Proceeds from issuance of commercial paper 300 —

Proceeds from issuance of senior notes 3,218 —

Cash proceeds from issuance of class A common stock under employee equity plans 153 162

Restricted stock and performance-based shares settled in cash for taxes ( 117 ) ( 142 )

Other financing activities ( 15 ) —

Net cash provided by (used in) financing activities ( 8,656 ) ( 10,791 )

22 unchanged sentences

All significant intercompany accounts and transactions are eliminated in consolidation.

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

During the prior quarter, 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.

In addition, the Company deconsolidated its Russian subsidiary, resulting in a pre-tax loss of $ 35 million for the nine months ended June 30, 2022, 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.

39 unchanged sentences

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)

3 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2022 2021 2022 2021

7 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2022 2021 2022 2021

28 unchanged sentences

litigation escrow account:

Six Months Ended

Nine Months Ended

(in millions)

19 unchanged sentences

Recovery through conversion rate adjustment ( 135 ) ( 6 ) 141

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

Balance as of June 30, 2022 $ 936 $ 1,517 $ ( 23 )

Preferred Stock Right to Recover for Covered Losses

4 unchanged sentences

Recovery through conversion rate adjustment (2)

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

( 35 ) ( 20 ) 53

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

(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.

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:

March 31, 2022 September 30, 2021

June 30, 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 March 31, 2022, the as-converted value of preferred stock is calculated as the product of:

(2) As of June 30, 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;

5 unchanged sentences

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

As required by the litigation management deed, on June 21, 2022, the sixth anniversary of the Visa Europe acquisition, Visa, in consultation with the VE territories litigation management committee, carried out a release assessment.

After the completion of this assessment, the Company announced on July 8, 2022 that it will release approximately $ 3.5 billion of the as-converted value from its series B and C preferred stock and will issue approximately 176,853 shares of series A preferred stock on July 29, 2022 (the “Sixth Anniversary Release”).

Each holder of a share of series B and C preferred stock will receive a number of series A preferred stock equal to the applicable conversion adjustment divided by 100 .

The Company will pay cash in lieu of issuing fractional shares of series A preferred stock.

Each share of series A preferred stock will be automatically converted into 100 shares of class A common stock in connection with a sale to a person eligible to hold class A common stock in accordance with Visa’s certificate of incorporation.

Effective July 29, 2022, the release will result in a downward adjustment to the series B and C conversion rates of 3.084 and 3.179 , respectively.

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

5 unchanged sentences

2022 September 30,

2021 March 31,

2021 June 30,

2022 September 30,

31 unchanged sentences

Treasury securities.

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.

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

As of June 30, 2022, $ 3.4 billion of the Company’s debt securities are due within one year and $ 2.2 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 March 31, 2022 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 June 30, 2022 including cumulative unrealized gains and losses:

(in millions)

3 unchanged sentences

Carrying amount, end of period $ 1,182

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:

Unrealized gains and losses included in the carrying value of the Company’s non-marketable equity securities still held as of June 30, 2022 and 2021 were as follows:

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2022 2021 2022 2021

2 unchanged sentences

Downward adjustments (including impairment) $ ( 284 ) $ — $ ( 337 ) $ ( 2 )

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.

For the three months ended June 30, 2022 and 2021, the Company recognized net unrealized losses of $ 278 million, and net unrealized gains of $ 434 million, respectively, on marketable and non-marketable equity securities still held as of quarter end.

For the nine months ended June 30, 2022 and 2021, the Company recognized net unrealized losses of $ 262 million and net unrealized gains of $ 610 million, respectively, on marketable and non-marketable equity securities still held as of quarter end.

Non-financial assets and liabilities.

1 unchanged sentence

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.

As of June 30, 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 March 31, 2022, the carrying value and estimated fair value of debt was $ 20.7 billion and $ 20.8 billion, respectively.

As of June 30, 2022, the carrying value and estimated fair value of debt was $ 23.8 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.

Other financial instruments not measured at fair value.

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.

At June 30, 2022, the carrying values of settlement receivable and payable and customer collateral approximate 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

24 unchanged sentences

1,750 1,750 2.09 %

1.50 % Senior Notes due June 2026

1,423 — 1.71 %

2.00 % Senior Notes due June 2029

1,054 — 2.13 %

2.375 % Senior Notes due June 2034

24,162 21,000

Unamortized discounts and debt issuance costs ( 181 ) ( 161 )

8 unchanged sentences

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

In June 2022, the Company issued Euro-denominated fixed-rate senior notes in a public offering in an aggregate principal amount of € 3.0 billion ($ 3.2 billion), with maturities ranging between 4 and 12 years.

The June 2026 Notes, 2029 Notes and 2034 Notes, or collectively, the "Euro Notes", have interest rates of 1.50 %, 2.00 % and 2.375 %, respectively.

Interest on the Euro Notes is payable annually on June 15 of each year, commencing June 15, 2023.

The net aggregate proceeds, after deducting discounts and debt issuance costs, were approximately € 3.0 billion ($ 3.2 billion).

The Company plans to use the net proceeds for general corporate purposes, which may include, among other things, the refinancing of existing indebtedness.

The Company’s outstanding senior notes, or collectively, the “Notes”, are senior unsecured obligations of the Company, ranking equally and ratably among themselves and with the Company’s existing and future unsecured and unsubordinated debt.

The Notes are not secured by any assets of the Company and are not guaranteed by any of the Company’s subsidiaries.

As of June 30, 2022, the Company was in compliance with all related covenants.

Each series of Notes may be redeemed as a whole or in part at the Company’s option at any time at specified

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

redemption prices.

In addition, each series of the Euro Notes may be redeemed as a whole at specified redemption prices upon the occurrence of certain U.S.

Non-derivative Financial Instrument Designated as a Net Investment Hedge

The Company designated € 1.2 billion of the € 3.0 billion Euro Notes, a non-derivative financial instrument, as a hedge against a portion of the Company’s Euro-denominated net investment in Visa Europe.

Changes in the value of the designated portion of the Euro Notes, attributable to the change in exchange rates at the end of each reporting period, partially offset the foreign currency translation adjustments resulting from the Euro-denominated net investment, are reported as a component of accumulated other comprehensive income or loss on the Company’s consolidated balance sheets.

Commercial Paper Program

1 unchanged sentence

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.

During the three months ended June 30, 2022, the Company repaid $ 300 million and $ 650 million of commercial paper that was issued in March 2022 and April 2022, respectively.

The Company had no outstanding obligations under the program as of June 30, 2022 and September 30, 2021.

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.

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.

During the nine months ended June 30, 2022, the Company’s maximum daily settlement exposure was $ 116.3 billion and the average daily settlement exposure was $ 71.8 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.

7 unchanged sentences

Total $ 4,889 $ 4,790

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

Note 9—Stockholders’ Equity

1 unchanged sentence

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:

March 31, 2022 September 30, 2021

June 30, 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 March 31, 2022 and September 30, 2021, respectively.

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

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

Conversion calculations for dividend payments are based on a conversion rate rounded to the tenth decimal.

Series A preferred stock issuance.

On July 29, 2022, the Company will issue approximately 176,853 shares of series A preferred stock in connection with the Sixth Anniversary Release.

See Note 5—U.S.

and Europe Retrospective Responsibility Plans .

Reduction in as-converted shares.

6 unchanged sentences

and Europe Retrospective Responsibility Plans .

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

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 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

litigation escrow account for the nine months ended June 30, 2022.

There was no comparable adjustment recorded for class B common stock for the nine months ended June 30, 2021.

Nine Months Ended

June 30, 2022

(in millions, except per share data)

4 unchanged sentences

(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.

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

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

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:

Six Months Ended

March 31, 2022 Six Months Ended

March 31, 2021

Nine Months Ended

June 30, 2022 Nine Months Ended

June 30, 2021

Series B Series C Series B Series C

11 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2022 2021 2022 2021

5 unchanged sentences

$ 2,433 $ 2,200 $ 9,486 $ 5,709

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

(1) Shares repurchased in the open market reflect repurchases that settled during the three and nine months ended June 30, 2022 and 2021, respectively.

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

4 unchanged sentences

These authorizations have no expiration date.

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

As of June 30, 2022, the Company’s repurchase program had remaining authorized funds of $ 7.3 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.

The Company declared and paid dividends of $ 798 million and $ 698 million during the three months ended June 30, 2022 and 2021, respectively, and $ 2.4 billion and $ 2.1 billion during the nine months ended June 30, 2022 and 2021, respectively.

On July 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 September 1, 2022, to all holders of record as of August 12, 2022.

Note 10—Earnings Per Share

4 unchanged sentences

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.

1 unchanged sentence

(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 March 31, 2022:

The following table presents earnings per share for the three months ended June 30, 2022:

Basic Earnings Per Share Diluted Earnings Per Share

7 unchanged sentences

Net income $ 3,411

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

The following table presents earnings per share for the nine months ended June 30, 2022:

Basic Earnings Per Share Diluted Earnings Per Share

8 unchanged sentences

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

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

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

Basic Earnings Per Share Diluted Earnings Per Share

7 unchanged sentences

Net income $ 2,575

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

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

Basic Earnings Per Share Diluted Earnings Per Share

7 unchanged sentences

Net income $ 8,727

(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.

(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 June 30, 2022 and 398 million for nine months ended June 30, 2022 and three and nine months ended June 30, 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 nine months ended June 30, 2022 and 42 million for the three and nine months ended June 30, 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 nine months ended June 30, 2022 and 9 million and 14 million of as-converted series A preferred stock for the three and nine months ended June 30, 2021, respectively, 15 million of as-converted series B preferred stock for the three months ended June 30, 2022 and 16 million of as-converted series B preferred stock for the nine months ended June 30, 2022 and three and nine months ended June 30, 2021 and 22 million of as-converted series C preferred stock for the three and nine months ended June 30, 2022 and 2021.

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

1 unchanged sentence

(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 and six months ended March 31, 2022 and 2021.

The common stock equivalents are not material for the three and nine months ended June 30, 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 six months ended March 31, 2022:

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, 2022:

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 $ 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)

Related to the EIP, the Company recorded share-based compensation cost, net of estimated forfeitures, of $ 145 million and $ 153 million for the three months ended June 30, 2022 and 2021, respectively, and $ 447 million and $ 417 million for the nine months ended June 30, 2022 and 2021, respectively.

Note 12—Income Taxes

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.

For the three and nine months ended June 30, 2022, the effective income tax rates were 11 % and 17 %, respectively, and for the three and nine months ended June 30, 2021, the effective income tax rates were 41 % and 26 %, respectively.

The effective tax rates for the three and nine months ended June 30, 2022 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, 2022, a decrease in the state apportionment rate, including a $ 176 million tax benefit related to prior years, as a result of a tax position taken related to a recent ruling;

• 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;

• 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.

During the three and nine months ended June 30, 2022, the Company’s gross unrecognized tax benefits decreased by $ 34 million and increased by $ 109 million, respectively.

The Company’s net unrecognized tax benefits that, if recognized, would favorably impact the effective tax rate, decreased by $ 75 million and $ 29 million, respectively.

The change in unrecognized tax benefits is primarily related to the change in state apportionment mentioned above, partially offset by an increase in gross timing differences as well as various tax positions across several jurisdictions.

During the three and nine months ended June 30, 2022, the Company’s accrued penalties related to uncertain tax positions decreased by $ 31 million.

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

9 unchanged sentences

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:

Six Months Ended

Nine Months Ended

(in millions)

18 unchanged sentences

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:

Six Months Ended

Nine Months Ended

(in millions)

4 unchanged sentences

Balance at end of period $ 1,480 $ 881

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.

During the three and nine months ended June 30, 2022, the Company recorded additional accruals of $ 716 million and $ 861 million, respectively, and deposited $ 600 million and $ 850 million, respectively, 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.

11 unchanged sentences

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:

Six Months Ended

Nine Months Ended

(in millions)

4 unchanged sentences

Covered Litigation

Interchange Multidistrict Litigation (MDL) - Putative Class Actions

On July 18, 2022, in response to an order from the U.S.

Court of Appeals for the Second Circuit, the district court certified its final approval of the Amended Settlement Agreement as a partial final judgment.

Interchange Multidistrict Litigation (MDL) - Individual Merchant Actions

Visa has reached settlements with a number of merchants representing approximately 55 % 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

8 unchanged sentences

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.

On June 1, 2022, two class action claims were filed against Visa with the CAT on behalf of UK businesses that accepted Visa-branded payment cards at any time from June 1, 2016 alleging that UK domestic, intra-European Economic Area, and inter-regional interchange fees on commercial credit cards, and inter-regional interchange fees on consumer cards, are anti-competitive.

The Europe retrospective responsibility plan covers liabilities and losses relating to the covered period, which generally refers to the period before the closing of the Visa Europe acquisition.

Other Litigation

On July 3, 2022, Visa filed a motion challenging jurisdiction in the action filed against Visa and MasterCard in the Israel Central District Court.

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

Other Litigation

Pulse Network

2 unchanged sentences

German ATM Litigation

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

Between December 2021 and June 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.

Visa has filed challenges to the jurisdiction of the German courts to hear these claims.

Foreign Currency Exchange Rate Litigation

3 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