What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-11-16 compared with 2021-11-18 · 433 added, 387 removed, 1561 unchanged (34% of the section changed)

2 unchanged sentences

As of September 30, 2022 and 2021 and for the years ended September 30, 2022, 2021 and 2020

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm ( KPMG LLP , Santa Clara, CA , Auditor Firm ID:

Consolidated Balance Sheets

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As discussed in Notes 5 and 20 to the consolidated financial statements, the Company is involved in various legal proceedings including the Interchange Multidistrict Litigation (MDL) – Individual Merchant Actions, and has recorded an accrued litigation liability of $1,441 million as of September 30, 2022.

In preparing its consolidated financial statements, the Company is required to assess the probability of loss associated with each legal proceeding and amount of such loss, if any.

The outcome of legal proceedings to which the Company is a party is not within the complete control of the Company or may not be known for prolonged periods of time.

In preparing its consolidated financial statements, the Company is required to assess the probability of loss associated with each legal proceeding and estimate the amount of such loss, if any.

The outcome of legal proceedings to which the Company is a party is not within the complete control of the Company and may not be known for prolonged periods of time.

We identified the assessment of the accrued liability for class members opting out of the Damages Class settlement, also known as the MDL – Individual Merchant Actions , as a critical audit matter.

This proceeding involves complex claims that are subject to substantial uncertainties and unascertainable damages.

This proceeding involves claims that are subject to inherent uncertainties and unascertainable damages.

The assessment of the accrued litigation liability for the MDL – Individual Merchant Actions required especially challenging auditor judgment due to the assumptions and estimation associated with the consideration and evaluation of possible outcomes.

Changes to the outcome could have a significant effect on the estimated amount of the liability.

The Company could incur judgments, enter into settlements or revise its expectations regarding the outcome of merchants’ claims, which could have a material effect on the estimated amount of the liability in the period in which the effect becomes probable and reasonably estimable.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s litigation accrual process for the MDL – Individual Merchant Actions .

We assessed the amounts accrued by reading letters received directly from the Company’s external legal counsel and in-house legal counsel that discussed the Company’s legal matters, including the MDL – Individual Merchant Actions .

We considered relevant publicly available information, such as published news articles about the Company and its legal matters, including the MDL – Individual Merchant Actions .

We evaluated the Company’s ability to estimate its monetary exposure by comparing historically recorded liabilities to actual monetary amounts incurred upon resolution of legal matters for merchants that opted out of the previous MDL class settlement.

To assess the estimated monetary exposure in the Company’s analysis, we compared such amounts to the complete population of amounts attributable to opt-out merchants.

We also performed sensitivity analysis over the Company’s monetary exposure calculations.

To assess the estimated monetary exposure in the Company’s analysis, we compared such amounts to the complete population of amounts attributable to the remaining opt-out merchants.

We performed a sensitivity analysis over the Company’s monetary exposure calculations, and we recalculated the amount of the ending accrued litigation liability.

We read letters received directly from the Company’s external legal counsel and internal legal counsel that discussed the Company’s legal matters, including the MDL – Individual Merchant Actions .

We also considered relevant publicly available information.

Report of Independent Registered Public Accounting Firm—(Continued)

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Total liabilities 49,920 45,307

Commitments and contingencies (Note 18)

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 September 30, 2021 and 2020 (the “series A preferred stock”) 486 2,437

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

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

Class A common stock, $ 0.0001 par value, 2,001,622 shares authorized, 1,677 and 1,683 shares issued and outstanding at September 30, 2021 and 2020, respectively

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

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

Commitments and contingencies (Note 18 and Note 20)

Series A, Series B and Series C convertible participating preferred stock (preferred stock), $ 0.0001 par value:

25 shares authorized and 5 (Series A less than one, Series B 2 , Series C 3 ) shares issued and outstanding

Class A, Class B and Class C common stock and additional paid-in capital, $ 0.0001 par value:

2,003,341 shares authorized (Class A 2,001,622 , Class B 622 , Class C 1,097 );

1,890 (Class A 1,635 , Class B 245 , Class C 10 ) and 1,932 (Class A 1,677 , Class B 245 , Class C 10 ) shares issued and outstanding

19,545 18,855

Right to recover for covered losses ( 35 ) ( 133 )

Additional paid-in capital 18,855 16,721

Accumulated income 16,116 15,351

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Non-operating Income (Expense)

Interest expense, net ( 513 ) ( 516 ) ( 533 )

Investment income and other 772 225 416

Interest expense ( 538 ) ( 513 ) ( 516 )

Investment income (expense) and other ( 139 ) 772 225

Total non-operating income (expense) ( 677 ) 259 ( 291 )

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Net income $ 14,957 $ 12,311 $ 10,866

Other comprehensive income (loss), net of tax:

Other comprehensive income (loss):

Investment securities:

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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

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

Paid-In Capital Accumulated

Preferred Stock Common Stock and Additional Paid-in Capital Right to Recover for Covered Losses Accumulated

Income Accumulated

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Income (Loss), Net Total

Series A Series B Series C Class

A Class B Class C

Shares Amount Shares Amount

(in millions, except per share data)

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1,932 $ 18,855 $ ( 133 ) $ 15,351 $ 436 $ 37,589

14,957 14,957

Other comprehensive income (loss), net of tax

Comprehensive income

Adoption of new accounting standards 3 3

( 2,805 ) ( 2,805 )

VE territory covered losses incurred ( 43 ) ( 43 )

Recovery through conversion rate adjustment ( 141 ) 141 —

Conversion of series A preferred stock upon sales into public market

Issuance of series A preferred stock — (2)

Conversion to class A common stock upon sales into public market — (2)

( 612 ) 10 612 —

Conversion of class C common stock upon sales into public market

Share-based compensation, net of forfeitures 602 602

Vesting of restricted stock and performance-based shares

Stock issued under equity plans 4 196 196

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

( 120 ) ( 120 )

Cash proceeds from issuance of class A common stock under employee equity plans 2 208 208

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

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1,890 $ 19,545 $ ( 35 ) $ 16,116 $ ( 2,369 ) $ 35,581

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

(1) As of September 30, 2022 and 2021, the book value of series A preferred stock was $ 1.0 billion and $ 486 million, respectively.

Refer to Note 5—U.S.

and Europe Retrospective Responsibility Plans for the book value of series B and series C preferred stock.

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

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

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—(Continued)

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

Paid-In Capital Accumulated

Preferred Stock Common Stock and Additional Paid-in Capital Right to Recover for Covered Losses Accumulated

Income Accumulated

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Income (Loss), Net Total

Series A Series B Series C Class

A Class B Class C

Shares Amount Shares Amount

(in millions, except per share data)

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1,939 $ 16,721 $ ( 39 ) $ 14,088 $ 354 $ 36,210

12,311 12,311

Other comprehensive income (loss), net of tax

Comprehensive income

Adoption of new accounting standards 3 3

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Recovery through conversion rate adjustment ( 55 ) 53 ( 2 )

Issuance of series A preferred stock — (1)

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

Conversion to class A common stock upon sales into public market — (2)

( 1,951 ) 29 1,951 —

Conversion of class C common stock upon sales into public market

Share-based compensation, net of forfeitures 542 542

Vesting of restricted stock and performance-based shares

Stock issued under equity plans 5 208 208

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

( 1 ) ( 144 ) ( 144 )

Cash proceeds from issuance of class A common stock under employee equity plans 1 190 190

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

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1,932 $ 18,855 $ ( 133 ) $ 15,351 $ 436 $ 37,589

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

(1) As of September 30, 2021 and 2020, the book value of series A preferred stock was $ 486 million and $ 2.4 billion, respectively.

Refer to Note 5—U.S.

and Europe Retrospective Responsibility Plans for the book value of series B and series C preferred stock.

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

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

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—(Continued)

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

Paid-In Capital Accumulated

Preferred Stock Common Stock and Additional Paid-in Capital Right to Recover for Covered Losses Accumulated

Income Accumulated

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Income (Loss), Net Total

Series B Series C Class A Class B Class C

Shares Amount Shares Amount

(in millions, except per share data)

Balance as of September 30, 2019 5 $ 5,462 1,974 $ 16,541 $ ( 171 ) $ 13,502 $ ( 650 ) $ 34,684

Net income 12,080 12,080

Other comprehensive income (loss), net of tax

10,866 10,866

Comprehensive income 10,876

Other comprehensive income (loss), net of tax

Adoption of new accounting standards 25 ( 25 ) —

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Recovery through conversion rate adjustment ( 164 ) 169 5

Conversion of class C common stock upon sales into public market

Issuance of series A preferred stock — (1)

Conversion to class A common stock upon sales into public market — (1)

( 207 ) 6 207 —

Share-based compensation, net of forfeitures 416 416

Vesting of restricted stock and performance-based shares

Stock issued under equity plans 4 190 190

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

( 1 ) ( 160 ) ( 160 )

Cash proceeds from issuance of class A common stock under employee equity plans 2 162 162

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

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Balance as of September 30, 2020 5 $ 5,086 1,939 $ 16,721 $ ( 39 ) $ 14,088 $ 354 $ 36,210

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

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

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Acquisitions, net of cash and restricted cash acquired ( 1,948 ) ( 75 ) ( 77 )

Purchases of / contributions to other investments ( 71 ) ( 267 ) ( 501 )

Purchases of other investments ( 86 ) ( 71 ) ( 267 )

Other investing activities 128 109 72

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Proceeds from issuance of senior notes 3,218 — 7,212

Payment of deferred purchase consideration related to the Visa Europe acquisition — — ( 1,236 )

Cash proceeds from issuance of class A common stock under employee equity plans 208 190 162

Cash proceeds from issuance of class A common stock under equity plans 196 208 190

Restricted stock and performance-based shares settled in cash for taxes ( 120 ) ( 144 ) ( 160 )

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Organization .

(“Visa” or the “Company”) is a global payments technology company that enables innovative, reliable and secure electronic payments 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 facilitates authorization, clearing and settlement of payment transactions and enables the Company to offer products and solutions that facilitate secure, reliable and efficient money movement for all participants in the ecosystem.

(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 operates one of the world’s largest electronic payments network — VisaNet — which provides transaction processing services (primarily authorization, clearing and settlement).

The Company offers products, solutions and services that facilitate secure, reliable and efficient money movement for 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.

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All significant intercompany accounts and transactions are eliminated in consolidation.

During fiscal 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 suspended its operations in Russia.

In addition, the Company deconsolidated its Russian subsidiary, resulting in a pre-tax loss of $ 35 million for the year ended September 30, 2022, which is included in general and administrative expense on the consolidated statements of operations.

The Company’s activities are interrelated, and each activity is dependent upon and supportive of the other.

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These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the 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 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.

As the effects of an evolving coronavirus (“COVID-19”) pandemic continues, 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.

The use of estimates in specific accounting policies is described further below as appropriate.

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The Company measures certain financial assets and liabilities at fair value on a recurring basis.

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

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

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

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Marketable equity securities.

Marketable equity securities, which are reported in investment securities on the consolidated balance sheets, include mutual fund investments related to various employee compensation and benefit plans.

Trading activity in these investments is at the direction of the Company’s employees.

Marketable equity securities, which are reported in investment securities on the consolidated balance sheets, include investments in publicly traded companies as well as mutual fund investments

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2022

investments are held in a trust and are not available for the Company’s operational or liquidity needs.

Interest and dividend income as well as gains and losses, realized and unrealized, from changes in fair value are recorded in non-operating income (expense), and offset in personnel expense on the consolidated statements of operations.

related to various employee compensation and benefit plans.

Interest and dividend income as well as gains and losses, realized and unrealized, from changes in fair value are recorded in non-operating income (expense).

Trading activity in the mutual fund investments is at the direction of the Company’s employees.

These investments are held in a trust and are not considered by the Company to be available for its operational or liquidity needs.

The corresponding liability is reported in accrued liabilities on the consolidated balance sheets, with changes in the liability recognized in personnel expense on the consolidated statements of operations.

Available-for-sale debt securities.

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All gains and losses on non-marketable equity securities, realized and unrealized, are recognized in non-operating income (expense).

The Company applies the equity method of accounting for investments in other entities when it holds between 20% and 50% ownership in the entity or when it exercises significant influence.

The Company applies the equity method of accounting for investments in other entities when it does not have control but has the ability to exercise significant influence.

Under the equity method, the Company’s share of each entity’s profit or loss is reflected in non-operating income (expense) on the consolidated statements of operations.

The equity method of accounting is also used for flow-through entities such as limited partnerships and limited liability companies when the investment ownership percentage is equal to or greater than 5% of outstanding ownership interests, regardless of whether the Company has significant influence over the investees.

The Company applies the fair value measurement alternative for investments in other entities when it holds less than 20% ownership in the entity and does not exercise significant influence, or for flow-through entities when the investment ownership is less than 5% and the Company does not exercise significant influence.

These investments consist of equity holdings in non-public companies and are recorded in other assets on the consolidated balance sheets.

The Company applies the fair value measurement alternative for equity investments in other entities when the Company does not have the ability to exercise significant influence.

The Company adjusts the carrying value of these equity securities to fair value when transactions for identical or similar investments of the same issuer are observable.

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however, the Company does not have the right to repledge these securities, but may sell these securities in the event of default by the client on its settlement obligations.

Letters of credit are provided primarily by client financial institutions to serve as irrevocable guarantees of payment.

Guarantees are provided primarily by parent financial institutions to secure the obligations of their subsidiaries.

Letters of credit are provided primarily by a client’s financial institutions to serve as irrevocable guarantees of payment.

Guarantees are provided primarily by a client’s parent to secure the obligations of its subsidiaries.

The Company routinely evaluates the financial viability of institutions providing the letters of credit and guarantees.

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The Company’s lease cost is included in general and administrative expense in the consolidated statements of operations and consists of amounts recognized under lease agreements, adjusted for impairment and sublease income.

Business Combinations .

The Company accounts for business combinations using the acquisition method and accordingly, the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree are generally recorded at their acquisition date fair values.

The excess of the purchase price over the fair value of net assets acquired, including identifiable intangible assets, is recorded as goodwill.

Acquisition-related costs are expensed in the periods in which the costs are incurred.

Intangible assets, net .

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The Company evaluates the likelihood of an unfavorable outcome in legal or regulatory proceedings to which it is a party and records a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

These judgments are subjective, based on the status of such legal or regulatory proceedings, the merits of the Company’s defenses and consultation with corporate and external legal counsel.

These judgments are subjective and based on a number of factors, including the specifics of such legal or regulatory proceedings, the merits of the Company’s defenses and consultation with internal and external legal counsel.

Actual outcomes of these legal and regulatory proceedings may differ materially from the Company’s estimates.

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The Company recognizes revenue, net of sales and other similar taxes, as the payments network services are performed in an amount that reflects the consideration the Company expects to receive in exchange for those services.

Fixed fees for payments network services are generally recognized ratably over the related service period.

The Company has elected the optional exemption to not disclose the remaining performance obligations related to payments network services and other performance obligations which are constrained by and dependent upon the future performance of its clients, which are variable in nature.

The Company also recognizes revenues, net of sales and other similar

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2022

taxes, from other value added services, including issuer solutions, acceptance solutions, risk and identity solutions and advisory services, as these value added services are performed.

for payments network services are generally recognized ratably over the related service period.

The Company also recognizes revenues, net of sales and other similar taxes, from other value added services, including issuing solutions, acceptance solutions, risk and identity solutions, open banking and advisory services, as these value added services are performed.

Service revenues consist mainly of revenues earned for services provided in support of client usage of Visa payment services.

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International transaction revenues are recognized in the same period the cross-border transactions occur or services are performed.

Other revenues consist mainly of value added services, license fees for use of the Visa brand or technology, fees for account holder services, certification, licensing and card benefits, such as extended account holder protection and concierge services.

Other revenues consist mainly of value added services, license fees for use of the Visa brand or technology and fees for account holder services, certification and licensing.

Other revenues are recognized in the same period the related transactions occur or services are performed.

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Sponsorship costs are recognized over the period in which the Company benefits from the sponsorship rights.

Promotional items are expensed as incurred, when the related services are received, or when the related event occurs.

Promotional costs are expensed as incurred, when the related services are received, or when the related event occurs.

Income taxes .

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The Company files a consolidated federal income tax return and, in certain states, combined state tax returns.

The Company elects to claim foreign tax credits in any given year if such election is beneficial to the Company.

See Note 19—Income Taxes .

The Company elects to

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2022

claim foreign tax credits in any given year if such election is beneficial to the Company.

See Note 19—Income Taxes .

Pension and other postretirement benefit plans .

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When the forecasted transaction occurs and is recognized in earnings, the amount in accumulated other comprehensive income (loss) related to that hedge is reclassified to the consolidated statements of operations in the corresponding account where revenue or expense is recorded.

Forward points are excluded from effectiveness testing and measurement purposes and are reported in earnings.

Cash flow hedges are subject to master netting agreements, which provide the Company with a legal right to net settle multiple payable and receivable positions with the same counterparty, in a single currency through a single payment.

Forward points are excluded from effectiveness testing purposes and are reported in earnings.

Derivatives designated as cash flow hedges are subject to master netting agreements, which provide the Company with a legal right to net settle multiple payable and receivable positions with the same counterparty, in a single currency through a single payment.

However, the Company presents fair values on a gross basis on the consolidated balance sheets.

The Company holds foreign exchange forward contracts which were designated as a net investment hedge against a portion of the Company’s net investment in Visa Europe.

The Company holds foreign exchange forward contracts and other non-derivative financial instruments which were designated as a net investment hedge against a portion of the Company’s net investment in Visa Europe.

The Company also holds interest rate and cross-currency swap agreements on a portion of the outstanding senior notes that allows the Company to manage its interest rate exposure through a combination of fixed and floating rates and reduce the overall cost of borrowing.

The Company designated the interest rate swaps as a fair value hedge and the cross-currency swap as a net investment hedge.

Gains and losses related to changes in fair value hedges are recognized in non-operating income (expense) along with a corresponding loss or gain related to the change in fair value of the underlying hedged item in the same line item in the consolidated statements of operations.

Gains and losses related to changes in the fair value of net investment hedges are recorded in other comprehensive income (loss).

The Company designated the interest rate swaps as a fair value hedge and the cross-currency swaps as a net investment hedge.

Gains and losses related to changes in fair value hedges are

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2022

excluded from the effectiveness testing of net investment hedges are recognized in non-operating income (expense).

The Company utilizes foreign exchange derivative contracts to hedge against foreign currency exchange rate fluctuations related to certain monetary assets and liabilities denominated in foreign currency.

Gains and losses resulting from changes in the fair value of these derivative instruments not designated for hedge accounting are recorded in general and administrative expense for hedges of operating activity, or non-operating income (expense) for hedges of non-operating activity.

Cash flows associated with a cash flow hedge are classified as an operating activity on the consolidated statement of cash flows.

recognized in non-operating income (expense) along with a corresponding loss or gain related to the change in fair value of the underlying hedged item in the same line item in the consolidated statements of operations.

Gains and losses related to changes in the fair value of net investment hedge derivatives and non-derivative financial instruments are recorded in other comprehensive income (loss).

Amounts excluded from the effectiveness testing of net investment hedges are recognized in non-operating income (expense).

Gains and losses resulting from changes in the fair value of these derivative instruments not designated for hedge accounting are recorded in general and administrative expense for hedges of operating activities, or non-operating income (expense) for hedges of non-operating activities.

Cash flows associated with a cash flow hedge are classified as an operating activity on the consolidated statements of cash flows.

Cash flows associated with a fair value hedge may be included in operating, investing or financing activities depending on the classification of the items being hedged.

Cash flows associated with a net investment hedge are classified as an investing activity.

See Note 13—Derivative Financial Instruments .

See Note 13—Derivative and Non-derivative Financial Instruments .

Share-based compensation .

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The dilutive effect of incremental common stock equivalents is reflected in diluted earnings per share by application of the treasury stock method.

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 and participating securities outstanding 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.

The weighted-average number of shares outstanding of each class of common stock reflects changes in ownership over the periods presented.

See Note 15—Stockholders’ Equity .

Diluted earnings per share is computed by dividing net income available by the weighted-average number of shares of common stock outstanding, participating securities outstanding 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, 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.

See Note 16—Earnings Per Share.

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, replacing the incurred loss model.

Subsequently, the FASB also issued amendments to this standard.

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

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

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.

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 on a prospective basis.

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 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 August 2018, the FASB issued ASU 2018-14, which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans 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.

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Note 2—Acquisitions

Pending Acquisitions

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.

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.

Terminated Acquisition

On January 12, 2021, Visa and Plaid Inc.

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

See Note 20—Legal Matters .

Currencycloud

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

The Company allocated $ 150 million of the purchase consideration to technology, customer relationships, 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 an 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.

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) 25

Goodwill 1,577

Total $ 1,866 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.

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 years ended September 30, 2021, 2020, and 2019:

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

For the Years Ended

8 unchanged sentences

Net revenues $ 29,310 $ 24,105 $ 21,846

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2022

For the Years Ended

9 unchanged sentences

However, the amount and timing of revenue recognition is affected by several factors, including contract modifications and terminations, which could impact the estimate of amounts allocated to remaining performance obligations and when such revenues could be recognized.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2021

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

8 unchanged sentences

Cash, cash equivalents, restricted cash and restricted cash equivalents $ 20,377 $ 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 generally 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 consolidated balance sheets.

and Europe Retrospective Responsibility Plans

7 unchanged sentences

• the Interchange Multidistrict Litigation .

In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, 1:05-md-01720-JG-JO (E.D.N.Y.) or MDL 1720, including all cases currently included in MDL 1720, any other case that includes claims for damages relating to the period prior to the Company’s IPO that has been or is transferred for coordinated or consolidated pre-trial proceedings at any time to MDL 1720 by the Judicial Panel on Multidistrict Litigation or otherwise included at any time in MDL 1720 by order of any court of competent jurisdiction;

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2022

1720 by the Judicial Panel on Multidistrict Litigation or otherwise included at any time in MDL 1720 by order of any court of competent jurisdiction;

• any claim that challenges the reorganization or the consummation thereof;

11 unchanged sentences

See Note 20—Legal Matters .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2021

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

litigation escrow account by fiscal year:

litigation escrow account:

(in millions)

Balance at beginning of period $ 894 $ 901

Return of takedown payment to the litigation escrow account — 467

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

Deposits into the litigation escrow account 850 —

Payments to opt-out merchants (1) , net of interest earned on escrow funds

( 295 ) ( 7 )

4 unchanged sentences

Under the terms of the plan, when the Company funds the U.S.

litigation escrow account, the shares of class B common stock are subject to dilution through an adjustment to the conversion rate of the shares of class B common stock to shares of class A common stock.

This has the same economic effect on diluted class A common stock earnings per share as repurchasing the Company’s class A common stock, because it reduces the class B conversion rate and consequently the as-converted class A common stock share count.

litigation escrow account, the value of the Company’s class B common stock are subject to dilution through a downward adjustment to the rate at which shares of class B common stock convert into shares of class A common stock.

This has the same economic effect on earnings per share as repurchasing the Company’s class A common stock, because it reduces the class B conversion rate and consequently the as-converted class A common stock share count with each deposit amount.

See Note 15—Stockholders’ Equity .

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covered litigation that is approved as required under Visa U.S.A.’s certificate of incorporation by the vote of Visa U.S.A.’s specified voting members.

The several obligation of each bank that is a party to the loss sharing agreement will equal the amount of any final judgment enforceable against Visa U.S.A., Visa International or any other signatory to the interchange judgment sharing agreement, or the amount of any approved settlement of a U.S.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2022

of any approved settlement of a U.S.

covered litigation, multiplied by such bank’s then-current membership proportion as calculated in accordance with Visa U.S.A.’s certificate of incorporation.

8 unchanged sentences

In addition, the monetary portion of any judgment assigned to Visa-related claims in accordance with the omnibus agreement would be treated as a Visa portion.

Visa would have no liability for the monetary portion of any judgment assigned to Mastercard-related claims in accordance with the

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2021

omnibus agreement, and if a judgment is not assigned to Visa-related claims or Mastercard-related claims in accordance with the omnibus agreement, then any monetary liability would be divided into a Mastercard portion at 33.3333 % and a Visa portion at 66.6667 %.

Visa would have no liability for the monetary portion of any judgment assigned to Mastercard-related claims in accordance with the omnibus agreement, and if a judgment is not assigned to Visa-related claims or Mastercard-related claims in accordance with the omnibus agreement, then any monetary liability would be divided into a Mastercard portion at 33.3333 % and a Visa portion at 66.6667 %.

The Visa portion of a settlement or judgment covered by the omnibus agreement would be allocated in accordance with specified provisions of the Company’s U.S.

6 unchanged sentences

UK loss sharing agreement.

The Company has entered into a loss sharing agreement with Visa Europe and certain of Visa Europe’s member financial institutions located in the United Kingdom (the “UK LSA members”).

Each of the UK LSA members has agreed, on a several and not joint basis, to compensate the Company for certain losses which may be incurred by the Company, Visa Europe or their affiliates as a result of certain existing and potential litigation relating to the setting and implementation of domestic multilateral interchange fee rates in the United Kingdom prior to the closing of the Visa Europe acquisition (the “Closing”), subject to the terms and conditions set forth therein and, with respect to each UK LSA member, up to a maximum amount of the up-front cash consideration received by such UK LSA member.

The Company has entered into a loss sharing agreement with Visa Europe and certain of Visa Europe’s member financial institutions located in the United Kingdom (UK LSA members).

Each of the UK LSA members has agreed, on a several and not joint basis, to compensate the Company for certain losses which may be incurred by the Company, Visa Europe or their affiliates as a result of certain existing and potential litigation relating to the setting and implementation of domestic multilateral interchange fee rates in the United Kingdom prior to the closing of the Visa Europe acquisition (Closing), subject to the terms and conditions set forth therein and, with respect to each UK LSA member, up to a maximum amount of the up-front cash consideration received by such UK LSA member.

The UK LSA members’ obligations under the UK loss sharing agreement are conditional upon, among other things, either (a) losses valued in excess of the sterling equivalent on June 21, 2016 of € 1.0 billion having arisen in UK covered claims (and such losses having reduced the conversion rate of the series B preferred stock accordingly), or (b) the conversion rate of the series B preferred stock having been reduced to zero pursuant to losses arising in claims relating to multilateral interchange fee rate setting in the Visa Europe territory.

Litigation management deed.

The Company has entered into a litigation management deed with Visa Europe which sets forth the agreed upon procedures for the management of the VE territory covered litigation, the allocation of losses resulting from this litigation (the “VE territory covered losses”) between the series B and C preferred stock, and any accelerated conversion or reduction in the conversion rate of the shares of series B and C preferred stock.

The Company has entered into a litigation management deed with Visa Europe which sets forth the agreed upon procedures for the management of the VE territory covered litigation, the allocation of losses resulting from this litigation (VE territory covered losses) between the series B and C preferred stock, and any accelerated conversion or reduction in the conversion rate of the shares of series B and C preferred stock.

The litigation management deed applies only to VE territory covered litigation (and resultant losses and liabilities).

The litigation management deed provides that the Company will generally control the conduct of the VE territory covered litigation, subject to certain obligations to report and consult with the litigation management committees for VE territory covered litigation (the “VE territory litigation management committees”).

The VE territory litigation management committees, which are composed of representatives of certain Visa Europe members, have also been granted consent rights to approve certain material decisions in relation to the VE territory covered litigation.

The litigation management deed provides that the Company will generally control the conduct of the VE territory covered litigation, subject to certain obligations to report and consult with the litigation management committee for VE territory covered litigation (VE Territory Litigation Management Committee).

The VE Territory Litigation Management

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2022

Committee, which is composed of representatives of certain Visa Europe members, has also been granted consent rights to approve certain material decisions in relation to the VE territory covered litigation.

The Company obtained certain protections for VE territory covered losses through the series B and C preferred stock, the UK loss sharing agreement, and the litigation management deed, referred to as the “Europe retrospective responsibility plan.” The plan covers VE territory covered litigation (and resultant liabilities and losses) relating to the covered period, which generally refers to the period before the Closing.

6 unchanged sentences

(a) the outstanding number of shares of preferred stock;

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2021

current conversion rate applicable to each class of preferred stock;

(b) the current conversion rate applicable to each class of preferred stock;

and (c) Visa’s class A common stock price.

2 unchanged sentences

The book value does not reflect changes in the underlying class A common stock price subsequent to the Closing.

net income will not be impacted by VE territory covered losses as long as the as-converted value of the preferred stock is greater than the covered loss.

VE territory covered losses will be recorded when the loss is deemed to be probable and reasonably estimable, or in the case of attorney’s fees, when incurred.

Concurrently, the Company will record a reduction to stockholders’ equity, which represents the Company’s right to recover such losses through adjustments to the conversion rate applicable to the preferred stock.

net income is not impacted by VE territory covered losses as long as the as-converted value of the preferred stock is greater than the covered loss.

VE territory covered losses are recorded when the loss is deemed to be probable and reasonably estimable, or in the case of attorney’s fees, when incurred.

Concurrently, the Company records a reduction to stockholders’ equity, which represents the Company’s right to recover such losses through adjustments to the conversion rate applicable to the preferred stock.

The reduction to stockholders’ equity is recorded in a contra-equity account referred to as “right to recover for covered losses.”

As required by the litigation management deed, at the fourth anniversary of the Visa Europe acquisition, Visa, in consultation with the VE territories litigation management committee, carried out a release assessment of the extent to which, if at all, it would be appropriate to effect a partial conversion of series B or C preferred stock into class A common stock or series A preferred stock.

After the completion of this assessment, in September 2020, the Company released $ 7.3 billion of the as-converted value from its series B and C preferred stock and issued 374,819 shares of series A preferred stock (the “Fourth anniversary release”).

VE territory covered losses may be recorded before the corresponding adjustment to the applicable conversion rate is effected.

Adjustments to the conversion rate may be executed once in any six-month period unless a single, individual loss greater than € 20 million is incurred, in which case, the six-month limitation does not apply.

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.

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 Territory Litigation Management Committee, carried out a release assessment.

After the completion of this assessment, the Company released $ 3.5 billion of the as-converted value from its series B and C preferred stock and issued 176,655 shares of series A preferred stock on July 29, 2022 (Sixth Anniversary Release).

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

The Company paid $ 3 million in cash in lieu of issuing fractional shares of series A preferred stock.

The release resulted in a downward adjustment to the series B and C preferred stock conversion rates.

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.

See Note 15—Stockholders’ Equity.

VE territory covered losses may be recorded before the corresponding adjustment to the applicable conversion rate is effected.

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

During the year ended September 30, 2021, the Company recovered $ 55 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.

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 during the year ended September 30, 2021:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2022

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

4 unchanged sentences

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

Sixth Anniversary Release ( 476 ) ( 705 ) —

Balance as of September 30, 2022 $ 460 $ 812 $ ( 35 )

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 (2)

( 35 ) ( 20 ) 53

3 unchanged sentences

(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—(Continued)

September 30, 2021

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 as of September 30, 2021 and 2020:

September 30,

49 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.

3 unchanged sentences

Derivative instruments are v alued using inputs that are observable in the market or can be derived principally from or corroborated by observable market data.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2022

Government-sponsored Debt Securities and U.S.

Treasury Securities

As of September 30, 2021 and 2020, gross unrealized gains and losses were not material.

As of September 30, 2021, $ 4.0 billion of the Company’s debt securities are due within one year and $ 1.7 billion is due between one to five years.

The amortized cost, unrealized gains and losses and fair value of debt securities were as follows:

September 30, 2022

Cost Gross Unrealized Fair

(in millions)

government-sponsored debt securities $ 458 $ — $ ( 1 ) $ 457

Treasury securities 4,937 — ( 133 ) 4,804

Total $ 5,395 $ — $ ( 134 ) $ 5,261

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

Debt securities with continuous unrealized losses for less than 12 months were as follows:

September 30, 2022

Fair Value Gross Unrealized Losses

(in millions)

government-sponsored debt securities $ 408 $ ( 1 )

Treasury securities 3,507 ( 133 )

Total $ 3,915 $ ( 134 )

The unrealized losses were primarily attributable to changes in interest rates.

The stated maturities of debt securities were as follows:

September 30,

(in millions)

Due within one year $ 3,125

Due after 1 year through 5 years 2,136

Total $ 5,261

Assets Measured at Fair Value on a Non-recurring Basis

17 unchanged sentences

Downward adjustments (including impairment) $ ( 341 ) $ ( 3 )

Investment Income

Investment income is recorded as non-operating income (expense) in the Company’s consolidated statements of operations and consisted of the following:

Investment Income (Expense)

Investment income (expense) is recorded as non-operating income (expense) in the Company’s consolidated statements of operations and consisted of the following:

For the Years Ended

7 unchanged sentences

Realized gains (losses), net 68 26 1

Investment income $ 731 $ 200 $ 383

Investment income (expense) $ ( 227 ) $ 731 $ 200

Other Fair Value Disclosures

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Other financial instruments not measured at fair value.

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

se ttlement receivable and payabl e and customer collateral.

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

A t September 30, 2022, the carrying values of se ttlement receivable and payabl e and customer collateral are an 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.

13 unchanged sentences

Property, equipment and technology, net $ 3,223 $ 2,715

Technology consists of both purchased and internally developed software.

Internally developed software primarily represents software utilized by the VisaNet electronic payments network.

At September 30, 2022 and 2021, accumulated amortization for technology was $ 3.7 billion and $ 3.2 billion, respectively.

At September 30, 2021, estimated future amortization expense on technology is as follows:

At September 30, 2022, estimated future amortization expense on technology was as follows:

For the Years Ending September 30,

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For fiscal 2022, 2021 and 2020, amortization expense related to finite-lived intangible assets was $ 90 million, $ 83 million and $ 80 million, respectively.

At September 30, 2021, estimated future amortization expense on finite-lived intangible assets is as follows:

At September 30, 2022, estimated future amortization expense on finite-lived intangible assets was as follows:

For the Years Ending September 30,

2 unchanged sentences

Estimated future amortization expense $ 76 $ 74 $ 59 $ 42 $ 40 $ 68 $ 359

The changes in goodwill during the years ended September 30, 2021 and 2020 are as follows:

The changes in goodwill during the years ended September 30, 2022 and 2021 were as follows:

(in millions)

3 unchanged sentences

Foreign currency translation

( 491 ) ( 15 )

Goodwill, end of period $ 17,787 $ 15,958

29 unchanged sentences

(in millions, except percentages)

2.20 % Senior Notes due December 2020

$ — $ 3,000 2.30 %

2.15 % Senior Notes due September 2022

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1,750 1,750 2.09 %

1.50 % Senior Notes due June 2026

1,325 — 1.71 %

2.00 % Senior Notes due June 2029

2.375 % Senior Notes due June 2034

Total debt 22,945 21,000

6 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 the outstanding senior notes.

See Note 1—Summary of Significant Accounting Policies and Note 13—Derivative Financial Instruments .

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 September 30, 2021, 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 redemption prices.

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

See Note 1—Summary of Significant Accounting Policies and Note 13—Derivative and Non-derivative Financial Instruments .

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

During the year ended September 30, 2022, the Company repaid $ 1.0 billion of principal upon maturity of its senior notes.

In August 2020, the Company issued fixed-rate senior notes in a public offering in an aggregate principal amount of $ 3.3 billion with maturities of 7 , 10 and a half and 30 years.

The August 2027 Notes, 2031 Notes and 2050 Notes, or collectively, the “August 2020 Notes”, have interest rates of 0.75 %, 1.10 % and 2.00 %, respectively.

Interest on the August 2020 Notes is payable semi-annually on February 15 and August 15 of each year, commencing on February 15, 2021.

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

The net proceeds from the offering of the August 2027 Notes will be used to

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2022

fund eligible green projects and the net proceeds from the offering of the 2031 Notes and 2050 Notes will be used for general corporate purposes.

In April 2020, the Company issued fixed-rate senior notes in a public offering in an aggregate principal amount of $ 4.0 billion with maturities of 7 , 10 and 20 years.

The April 2027 Notes, 2030 Notes and 2040 Notes, or collectively, the “April 2020 Notes”, have interest rates of 1.90 %, 2.05 % and 2.70 %, respectively.

Interest on the April 2020 Notes is payable semi-annually on April 15 and October 15 of each year, commencing October 15, 2020.

The net aggregate proceeds, after deducting discounts and debt issuance costs, were approximately $ 4.0 billion.

The net proceeds from the offering of the April 2020 Notes will be used for general corporate purposes.

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

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

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

At September 30, 2022, future principal payments on the Company’s outstanding debt were as follows:

For the Years Ending September 30,

2023 2024 2025 2026 2027 Thereafter Total

(in millions)

Future principal payments $ 2,250 $ — $ — $ 5,325 $ 2,750 $ 12,620 $ 22,945

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.

During the year ended September 30, 2022, the Company issued and repaid $ 950 million of commercial paper.

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

Credit Facility

On July 25, 2019, the Company entered into an amended and restated credit agreement for a 5 year, unsecured $ 5.0 billion revolving credit facility (the "Credit Facility"), which will expire on July 25, 2024.

On July 25, 2019, the Company entered into an amended and restated credit agreement for a 5 year, unsecured $ 5.0 billion revolving credit facility (Credit Facility), which will expire on July 25, 2024.

Interest on borrowings denominated in U.S.

dollars under the Credit Facility will be charged at the London Interbank Offered Rate or an alternative base rate, in each case plus applicable margins that fluctuate based on the applicable credit rating of the Company's senior unsecured long-term debt.

The Company has agreed to pay a commitment fee which will fluctuate based on such applicable rating of the Company.

On October 6, 2021, the Company further amended the Credit Facility to ensure that effective January 1, 2022, interest on borrowings denominated in British Pound Sterling and Euros will be charged at the Sterling Overnight Index Average Reference Rate and the Euro Short-Term Rate respectively or the applicable successor rates, plus applicable margins.

The Credit Facility is not governed by any financial covenants.

This Credit Facility is maintained to ensure the integrity of the payment card settlement process and for general corporate purposes.

Interest on borrowings under the Credit Facility will be charged at the London Interbank Offered Rate or an alternative base rate, in each case plus applicable margins that fluctuate based on the applicable credit rating of the Company's senior unsecured long-term debt.

The Company has agreed to pay a commitment fee which will fluctuate based on such applicable rating of the Company.

As of September 30, 2022 and 2021, the Company had no amounts outstanding under the Credit Facility.

At September 30, 2021, future principal payments on the Company’s outstanding debt were as follows:

For the Years Ending September 30,

2022 2023 2024 2025 2026 Thereafter Total

(in millions)

Future principal payments $ 1,000 $ 2,250 $ — $ — $ 4,000 $ 13,750 $ 21,000

Note 11—Pension and Other Postretirement Benefits

3 unchanged sentences

pension plans and the non-U.S.

plans, comprising only the Visa Europe plans.

Disclosures relating to other U.S.

postretirement benefit plans and other non-U.S.

postretirement benefit plans and certain non-U.S.

pension benefit plans are not included as they are immaterial, individually and in aggregate.

8 unchanged sentences

pension benefits is to contribute annually no less than the minimum required contribution under ERISA.

Under the Visa Europe plans, retirement benefits are provided based on the participants’ final pensionable pay and are currently closed to new entrants.

However, future benefits continue to accrue for active participants.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2022

funding policy is to contribute in accordance with the appropriate funding requirements agreed with the trustees of the UK pension plans.

Under the Visa Europe plans, retirement benefits are provided based on the participants’ final pensionable pay and are currently closed to new entrants.

However, future benefits continue to accrue for active participants.

The funding policy is to contribute in accordance with the appropriate funding requirements agreed with the trustees of the UK pension plans.

Additional funding amounts may be agreed to with the UK pension plan trustees.

13 unchanged sentences

Foreign currency exchange rate changes

— — ( 67 ) 24

Benefit obligation at end of period $ 663 $ 877 $ 278 $ 520

7 unchanged sentences

Foreign currency exchange rate changes

— — ( 76 ) 21

Fair value of plan assets at end of period

12 unchanged sentences

Net actuarial (gain) loss $ 150 $ ( 11 ) $ 35 $ 47

At September 30, 2022 and 2021, the Company’s aggregated pension plan assets exceeded the benefit obligations.

For individual plans where the benefit obligations exceeded plan assets, the projected benefit obligation, the accumulated benefit obligation and plan assets were not material at September 30, 2022 and 2021.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2022

Benefit obligations in excess of plan assets were as follows:

Plans Non-U.S.

September 30, September 30,

2021 2020 2021 2020

(in millions)

Accumulated benefit obligation in excess of plan assets

Accumulated benefit obligation at end of period $ ( 6 ) $ ( 7 ) $ ( 520 ) $ ( 563 )

Fair value of plan assets at end of period $ — $ — $ 548 $ 525

Projected benefit obligation in excess of plan assets

Benefit obligation at end of period $ ( 6 ) $ ( 7 ) $ ( 520 ) $ ( 563 )

Fair value of plan assets at end of period $ — $ — $ 548 $ 525

Net periodic benefit cost consists of the following:

17 unchanged sentences

Amortization of actuarial gain (loss) — ( 3 ) ( 14 ) — ( 6 ) ( 2 )

Current year prior service cost — — — — — 1

Total recognized in other comprehensive (income) loss $ 170 $ ( 146 ) $ ( 19 ) $ ( 5 ) $ ( 51 ) $ 19

Total recognized in net periodic benefit cost and other comprehensive (income) loss $ 124 $ ( 189 ) $ ( 49 ) $ ( 10 ) $ ( 48 ) $ 20

For the year ended September 30, 2021, the net gain was primarily attributable to market-driven increases in the fair value of plan assets combined with an increase in the discount rate.

For the year ended September 30, 2022, the net loss was primarily attributable to market-driven decrease in the fair value of plan assets offset by an increase in the discount rate.

For the year ended September 30, 2021, the net gain was primarily attributable to market-driven increase in the fair value of plan assets combined with an increase in the discount rate.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

16 unchanged sentences

plans include a cash balance plan with promised interest crediting rates.

Under the plan rules, for fiscal 2021, 2020 and 2019, the weighted average interest crediting rates for the benefit obligation were 1.98 %, 1.88 %, 2.26 %, respectively, and the weighted average interest crediting rates for the benefit cost set at the beginning of the period were 1.88 %, 2.26 % and 3.23 % for fiscal 2021, 2020 and 2019, respectively.

Under the plan rules, for fiscal 2022, 2021 and 2020, the weighted average interest crediting rates for the benefit obligation were 4.52 %, 1.98 % and 1.88 %, respectively, and the weighted average interest crediting rates for the benefit cost set at the beginning of the periods were 1.98 %, 1.88 % and 2.26 %, respectively.

Pension Plan Assets

15 unchanged sentences

September 30, 2022

The following tables set forth by level, within the fair value hierarchy, the pension plans’ investments at fair value as of September 30, 2021 and 2020, including the impact of transactions that were not settled at the end of September:

The following tables set forth by level, within the fair value hierarchy, the pension plans’ investments at fair value, including the impact of transactions that were not settled at the end of September:

Fair Value Measurements at September 30 Using Inputs Considered as

29 unchanged sentences

Collective investment funds are unregistered investment vehicles that generally commingle the assets of multiple fiduciary clients, such as pension and other employee benefit plans, to invest in a portfolio of stocks, bonds or other securities.

Although the collective investment funds held by the plan are ultimately invested in publicly traded equity securities, their own unit values are not directly observable, and therefore they are classified as Level 2.

Although the collective investment funds held by the plan are ultimately invested in publicly traded equity and debt securities, their own unit values are not directly observable, and therefore they are classified as Level 2.

Equity funds are investments in mutual funds that in-turn ultimately invest in equity securities of various jurisdictions.

21 unchanged sentences

The Company sponsors a defined contribution plan, or 401(k) plan, that covers substantially all of its employees residing in the U.S.

In fiscal 2021, 2020 and 2019, personnel costs included $ 141 million, $ 140 million, and $ 121 million, respectively, of expenses attributable to the Company’s employees under the 401(k) plan.

In fiscal 2022, 2021 and 2020, personnel expenses included $ 161 million, $ 141 million, and $ 140 million, respectively, attributable to the Company’s employees under the 401(k) plan.

The Company’s contributions to this 401(k) plan are funded on a current basis, and the related expenses are recognized in the period that the payroll expenses are incurred.

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

The Company held the following collateral to manage settlement exposure:

September 30,

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September 30, 2022

Note 13—Derivative Financial Instruments

Note 13—Derivative and Non-derivative Financial Instruments

As of September 30, 2022 and 2021, the aggregate notional amount of the Company’s derivative contracts outstanding in its hedge program was $ 11.9 billion and $ 11.2 billion, respectively.

As of September 30, 2022 and 2021, the aggregate notional amount of the derivative contracts not designated as hedging instruments was $ 1.5 billion and $ 0.8 billion, respectively.

As of September 30, 2021 and 2020, the following table shows the Company’s derivative instruments at gross fair value:

The following table shows the Company’s derivative instruments at gross fair value:

September 30,

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Cross-currency swap Other liabilities $ — $ 90

Interest rate swap Other liabilities $ 322 $ —

Not Designated as Hedging Instrument:

Foreign exchange contracts Accrued liabilities $ 47 $ 6

Cash flow hedges.

For fiscal 2022, the Company recognized $ 190 million of pre-tax net gains from cash flow hedges in other comprehensive income (loss).

The amounts recognized in other comprehensive income (loss) were no t material for fiscal 2021 and 2020.

The Company estimates that $ 140 million of pre-tax net gains related to cash flow hedges recorded in accumulated other comprehensive income (loss) as of September 30, 2022, will be reclassified into the consolidated statement of operations within the next 12 months.

Net investment hedges .

For fiscal 2022, 2021 and 2020, the Company recognized pre-tax net gains (losses) in other comprehensive income (loss) related to net investment hedges of $ 845 million, $ 20 million and ($ 318 ) million, respectively.

For fiscal 2022, 2021 and 2020, the Company recognized an increase in earnings of $ 151 million, $ 156 million and $ 150 million, respectively, related to excluded forward points and interest differentials from forward contracts and swap agreements.

Non-derivative financial instrument designated as net investment hedge .

As of September 30, 2022, the Company had designated € 1.2 billion of the € 3.0 billion Euro Notes issued in June 2022, a non-derivative financial instrument, as a hedge against a portion of the Company’s Euro-denominated net investment in Visa Europe.

The foreign currency gains and losses associated with this hedging activity are recorded as foreign currency translation adjustments in accumulated other comprehensive income (loss).

Credit and market risks.

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The Company mitigates this risk by entering into master netting agreements, and such agreements require each party to post collateral against its net liability position with the respective counterparty.

As of September 30, 2021, the Company has received collateral of $ 35 million from counterparties, which is included in accrued liabilities in the consolidated balance sheets, and posted collateral of $ 9 million, which is included in prepaid expenses and other current assets in the consolidated balance sheets.

Notwithstanding the Company’s efforts to manage foreign exchange risk, there can be no absolute assurance that its hedging activities will adequately protect against the risks associated with foreign currency fluctuations.

As of September 30, 2021, credit and market risks related to derivative instruments were not considered significant.

As of September 30, 2022, the Company has received collateral of $ 348 million from counterparties, which is included in accrued liabilities in the consolidated balance sheets, and posted collateral of $ 62 million, which is included in prepaid expenses and other

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2022

current assets in the consolidated balance sheets.

As of September 30, 2022, credit and market risks related to derivative instruments were not considered significant.

Note 14—Enterprise-wide Disclosures and Concentration of Business

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Net revenues earned in the U.S.

were approximately 46 % of total net revenues in each of fiscal 2021 and fiscal 2020 and 45 % of total net revenues in fiscal 2019.

No individual country, other than the U.S., generated more than 10% of total net revenues in these years.

In fiscal 2021, the Company had one client that accounted for 11 % of its total net revenues.

were approximately 44 % of total net revenues in fiscal 2022 and 46 % of total net revenues in each of fiscal 2021 and fiscal 2020.

No individual country, other than the U.S., generated 10% or more of total net revenues in these years.

In fiscal 2022 and fiscal 2021, the Company had one client that accounted for 10 % and 11 % of its total net revenues, respectively.

In fiscal 2020, the Company had two clients that accounted for 11 % and 10 % of its total net revenues, respectively.

In fiscal 2019, no clients generated greater than 10% of the Company’s total net revenues .

Note 15—Stockholders’ Equity

Series A preferred stock issuance.

In September 2020, the Company issued 374,819 shares of series A preferred stock in connection with the Fourth anniversary release.

See Note 5—U.S.

and Europe Retrospective Responsibility Plans .

As-converted class A common stock.

The number of shares of each series and class, and the number of shares of class A common stock on an as-converted basis at September 30, 2021 and 2020, were as follows:

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:

September 30,

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

Series A preferred stock issuance.

In July 2022, the Company issued 176,655 shares of series A preferred stock in connection with the Sixth Anniversary Release.

See Note 5—U.S.

and Europe Retrospective Responsibility Plans .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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Reduction in as-converted shares.

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

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 series B and C preferred stock and is required to undertake periodic release assessments following the anniversary of the Visa Europe acquisition to determine if value should be released from the series B and C preferred stock.

The recovery and any releases of value have the same economic effect on earnings per share as repurchasing the Company’s class A common stock, because it reduces 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 .

The following table present s the reduction in as-converted series B and C preferred stock after the Company recovered V E territory covered losses through conversion rate adjustments and the Fourth anniversary release:

The following table present s the reduction in the number of as-converted series B and C preferred stock after the Company recovered V E territory covered losses through conversion rate adjustments and completed its Sixth Anniversary Release in fiscal 2022 and fourth anniversary release in fiscal 2020 (collectively Anniversary Releases):

For the Years Ended September 30,

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(in millions, except per share data)

Reduction in equivalent number of as-converted shares of class A common stock

Reduction in equivalent number of class A common stock 8 10 — (1)

Effective price per share (2)

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$ 135 $ 6 $ 35 $ 20 $ 72 $ 92

Fourth anniversary release $ — $ — $ 3,084 $ 4,216 $ — $ —

Anniversary Releases $ 1,510 $ 1,982 $ — $ — $ 3,084 $ 4,216

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

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Under the terms of the U.S.

retrospective responsibility plan, when the Company makes a deposit into the litigation escrow account, the shares of class B common stock are subject to dilution through a reduction to the conversion rate of the shares of class B common stock to shares of class A common stock.

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 rate at which shares of class B common stock convert into shares of class A common stock.

See Note 5—U.S.

and Europe Retrospective Responsibility Plans.

The following table presents the reduction in as-converted class B common stock after deposits into the litigation escrow account for the following fiscal years:

For the Years Ended September 30,

2021 2020 2019

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

litigation escrow account for fiscal 2022.

There was no comparable adjustment recorded for class B common stock for fiscal 2021 and 2020.

For the Year Ended

September 30, 2022

(in millions, except per share data)

Reduction in equivalent number of as-converted shares of class A common stock

Reduction in equivalent number of class A common stock 4

Effective price per share (1)

$ — $ — $ 174.73

Deposits under the U.S.

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(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—(Continued)

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Common stock repurchases.

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

The following table presents share repurchases in the open market:

For the Years Ended September 30,

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Average repurchase price per share and total cost are 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”).

In January 2021, the Company’s board of directors authorized a $ 8.0 billion share repurchase program and in December 2021, authorized an additional $ 12.0 billion share repurchase program (December 2021 Program).

As of September 30, 2022, the Company’s December 2021 Program had remaining authorized funds of $ 5.2 billion.

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

In October 2022, the Company’s board of directors authorized a new $ 12.0 billion share repurchase program.

These authorizations have no expiration date.

As of September 30, 2021, the Company’s January 2021 Program had remaining authorized funds of $ 4.8 billion.

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

In fiscal 2021, 2020 and 2019, the Company declared and paid dividends of $ 2.8 billion, $ 2.7 billion and $ 2.3 billion, respectively, at a quarterly rate of $ 0.32 , $ 0.30 and $ 0.25 per share, respectively.

On October 22, 2021, 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 December 7, 2021, to all holders of record of the Company’s common and preferred stock as of November 12, 2021.

In fiscal 2022, 2021 and 2020, the Company declared and paid dividends of $ 3.2 billion, $ 2.8 billion and $ 2.7 billion, respectively.

On October 21, 2022, the Company’s board of directors declared a quarterly cash dividend of $ 0.45 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 December 1, 2022, to all holders of record as of November 11, 2022.

Class B common stock.

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Class C common stock.

As of September 30, 2021, all of the shares of class C common stock have been released from transfer restrictions.

A total of 141 million shares have been converted from class C to class A common stock upon their sale into the public market.

There are no existing transfer restrictions on class C common stock.

As of September 30, 2022, a total of 142 million shares have been converted from class C to class A common stock upon their sale into the public market.

Preferred stock.

In connection with the Visa Europe acquisition, three new series of preferred stock of the Company were created.

In connection with the Visa Europe acquisition, three series of preferred stock of the Company were created.

Upon issuance, all of the preferred stock participate on an as-converted basis in regular quarterly cash dividends declared on the Company’s class A common stock.

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Note 16—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.

The weighted-average number of shares outstanding of each class of common stock reflects changes in ownership over the periods presented.

See Note 15—Stockholders’ Equity .

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:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2021

The following table presents earnings per share for fiscal 2022:

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(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 each of fiscal 2021 and 2020 and 400 million for fiscal 2019.

The weighted-average number of shares of as-converted class B common stock used in the income allocation was 397 million for each of fiscal 2022 and 398 million for fiscal 2021 and 2020.

The weighted-average number of shares of as-converted class C common stock used in the income allocation was 40 million, 42 million and 44 million for fiscal 2022, 2021 and 2020, respectively.

The weighted-average number of shares of preferred stock included within participating securities was 12 million and 1 million of as-converted series A preferred stock for fiscal 2021 and 2020, respectively, 16 million of as-converted series B preferred stock for fiscal 2021 and 32 million of as-converted series B preferred stock for each of fiscal 2020 and 2019, and 22 million, 43 million, and 44 million of as-converted series C preferred stock for fiscal 2021, 2020 and 2019, respectively.

The weighted-average number of shares of preferred stock included within participating securities was 8 million, 12 million and 1 million of as-converted series A preferred stock for fiscal 2022, 2021 and 2020, respectively, 14 million, 16 million and 32 million of as-converted series B preferred stock for fiscal 2022, 2021 and 2020, and 20 million, 22 million and 43 million of as-converted series C preferred stock for fiscal 2022, 2021 and 2020, respectively.

(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 are 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.

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2007 Equity Incentive Compensation Plan

The Company’s 2007 Equity Incentive Compensation Plan, or the EIP, authorizes the compensation committee of the board of directors to grant non-qualified stock options (“options”), restricted stock awards, RSUs and performance-based shares to its employees and non-employee directors.

The Company’s 2007 Equity Incentive Compensation Plan, or the EIP, authorizes the compensation committee of the board of directors to grant non-qualified stock options (options), RSUs, performance-based shares and restricted stock awards to its employees and non-employee directors.

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 of class A common stock authorized for grant from 236 million to 198 million.

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Options issued under the EIP expire 10 years from the date of grant and primarily vest ratably over 3 years from the date of grant, subject to earlier vesting in full under certain conditions.

During fiscal 2021, 2020 and 2019, the fair value of each stock option was estimated on the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions:

The fair value of each stock option was estimated on the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions:

For the Years Ended September 30,

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(1) Based on Visa’s historical exercise experience.

(2) Based upon the zero coupon U.S.

treasury bond rate over the expected term of the awards.

(2) Based on the zero-coupon U.S.

Treasury constant maturity yield curve, continuously compounded over the expected term of the awards.

(3) Based on the Company’s implied and historical volatilities.

2 unchanged sentences

September 30, 2022

The following table summarizes the Company’s option activity for fiscal 2021:

The following table summarizes the Company’s option activity:

Options Weighted-

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During fiscal 2022, 2021 and 2020, the total intrinsic value of options exercised was $ 56 million, $ 124 million and $ 146 million, respectively, and the tax benefit realized was $ 11 million, $ 23 million and $ 31 million, respectively.

As of September 30, 2021, there was $ 23 million of total unrecognized compensation cost related to unvested options, which is expected to be recognized over a weighted-average period of approximately 0.42 years.

As of September 30, 2022, there was $ 22 million of total unrecognized compensation cost related to unvested options, which is expected to be recognized over a weighted-average period of approximately 0.38 year.

Restricted Stock Units

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During fiscal 2022, 2021 and 2020, the total grant date fair value of RSUs vested was $ 380 million , $ 331 million and $ 284 million, respectively.

The following table summarizes the Company’s RSU activity for fiscal 2021:

The following table summarizes the Company’s RSU activity:

Units Weighted-

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The market condition is based on the Company’s total shareholder return ranked against that of other companies that are included in the Standard & Poor’s 500 Index.

For fiscal 2021, the fair value of the performance-based shares incorporating the market condition is estimated on the grant date using a Monte Carlo simulation model with the following weighted-average assumptions:

risk-free rate of return of 0.2 %, expected term of 2 years, expected volatility of 27.2 % and expected dividend yield of 0.6 %.

In fiscal 2021, 2020 and 2019, the weighted-average grant date fair value of performance-based shares granted was $ 229.81 , $ 211.08 and $ 153.42 per share, respectively.

The fair value of each performance-based shares incorporating the market condition was estimated on the date of grant using a Monte Carlo simulation model with the following weighted-average assumptions:

For the Years Ended September 30,

2022 2021 2020

Expected term (in years) 2.05 2.00 1.90

Risk-free rate of return (1)

0.5 % 0.2 % 1.6 %

Expected volatility (2)

28.3 % 27.2 % 20.9 %

Expected dividend yield (3)

0.8 % 0.6 % 0.7 %

Fair value per performance-based share granted $ 186.50 $ 229.81 $ 211.08

(1) Based on the zero-coupon U.S.

treasury constant maturity yield curve, continuously compounded over the expected term of the awards

(2) Based on the Company’s implied and historical volatilities.

(3) Based on the Company’s annual dividend rate on the date of grant.

Performance-based shares vest over three years and are subject to earlier vesting in full under certain conditions.

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It is recorded net of estimated forfeitures and adjusted as appropriate throughout the performance period.

The following table summarizes the maximum number of performance-based shares which could be earned and related activity for fiscal 2021:

The following table summarizes the maximum number of performance-based shares which could be earned and related activity:

Shares Weighted-

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

At September 30, 2021, there was $ 40 million of total unrecognized compensation cost related to unvested performance-based shares, which is expected to be recognized over a weighted-average period of approximately 0.82 years.

At September 30, 2022, there was $ 39 million of total unrecognized compensation cost related to unvested performance-based shares, which is expected to be recognized over a weighted-average period of approximately 0.89 year.

Employee Stock Purchase Plan

The Visa Inc.

Employee Stock Purchase Plan (the “ESPP”) permits eligible employees to purchase the Company’s class A common stock at a 15 % discount of the stock price on the purchase date, subject to certain restrictions.

Employee Stock Purchase Plan (ESPP) permits eligible employees to purchase the Company’s class A common stock at a 15 % discount of the stock price on the purchase date, subject to certain restrictions.

A total of 20 million shares of class A common stock have been reserved for issuance under the ESPP.

In fiscal 2022, 2021 and 2020, the ESPP did not have a material impact on the consolidated financial statements.

Note 18—Commitments and Contingencies

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2022

Note 18—Commitments

The Company has software licenses throughout the world with varying expiration dates.

4 unchanged sentences

Software licenses $ 83 $ 27 $ 7 $ — $ — $ — $ 117

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2021

Note 19—Income Taxes

6 unchanged sentences

Total income before taxes $ 18,136 $ 16,063 $ 13,790

For fiscal 2021, U.S.

income before taxes included $ 3.1 billion, and for fiscal 2020 and 2019 included $ 3.0 billion, of the Company’s U.S.

For fiscal 2022, 2021 and 2020, U.S.

income before taxes included $ 3.6 billion, $ 3.1 billion, and $ 3.0 billion, respectively, of the Company’s U.S.

entities’ income from operations outside of the U.S.

5 unchanged sentences

State and local 104 69 212

1,245 869 743

Total current taxes 3,515 2,881 2,617

1 unchanged sentence

State and local ( 77 ) ( 28 ) 9

( 28 ) 956 256

Total deferred taxes ( 336 ) 871 307

2 unchanged sentences

September 30, 2022

At September 30, 2021 and 2020, the tax effect of temporary differences that give rise to significant portions of deferred tax assets and liabilities, are presented below:

The tax effect of temporary differences that give rise to significant portions of deferred tax assets and liabilities, are presented below:

September 30,

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Net deferred tax liabilities $ ( 5,245 ) $ ( 6,048 )

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

As a result, the Company recorded a $ 1.0 billion non-recurring, non-cash tax expense related to the remeasurement of its UK deferred tax liabilities, primarily related to intangibles recorded upon the acquisition of Visa Europe in fiscal 2016.

The increase in deferred tax liabilities reflects the remeasurement of UK deferred tax liabilities.

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

on March 11, 2021.

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

The Inflation Reduction Act (IRA) of 2022 was enacted in the U.S.

on August 16, 2022, primarily including a 15% corporate alternative minimum tax on adjusted financial statement income applicable beginning in fiscal 2024 and a 1% excise tax on corporate stock buy-backs applicable to stock buy-backs after December 31, 2022.

The IRA is not expected to have a material impact on the Company’s financial statements.

At September 30, 2022 and 2021, net deferred tax assets of $ 87 million and $ 80 million, respectively, are reflected in other assets on the consolidated balance sheets.

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The fiscal 2022 and 2021 valuation allowances relate primarily to foreign net operating losses from subsidiaries acquired in recent years.

As of September 30, 2021, the Company had $ 42 million federal, $ 15 million state and $ 390 million foreign net operating loss carryforwards from acquired subsidiaries.

Federal net operating loss carryforwards generated in years prior to fiscal 2018 will expire in fiscal 2034 through 2037.

State net operating loss carryforwards will expire in fiscal 2028 through 2035.

Federal net operating losses generated after fiscal 2017 and foreign net operating losses may be carried forward indefinitely.

The Company expects to fully utilize the state net operating loss carryforwards in future years.

As of September 30, 2022, the Company had $ 517 million foreign net operating loss carryforwards from acquired subsidiaries.

Foreign net operating losses may be carried forward indefinitely.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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Conclusion of audits — — % ( 255 ) ( 2 %) — — %

State tax apportionment position ( 176 ) ( 1 %) — — % — — %

Other, net ( 82 ) — % ( 90 ) — % ( 17 ) — %

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The effective tax rate in fiscal 2022 differs from the effective tax rate in fiscal 2021 primarily due to the following:

• during fiscal 2021, a $ 1.0 billion non-recurring non-cash tax expense related to the remeasurement of UK deferred tax liabilities, as discussed above;

• during fiscal 2022, a decrease in the state tax apportionment ratio, including a $ 176 million tax benefit related to prior years, as a result of a tax position taken related to a recent ruling;

• during fiscal 2021, a $ 1.0 billion non-recurring, non-cash tax expense related to the remeasurement of UK deferred tax liabilities as a result of the increase in UK tax rate from 19% to 25%, effective April 1, 2023;

• during fiscal 2021, $ 255 million of tax benefits recognized as a result of the conclusion of audits by taxing authorities.

• during fiscal 2020, a $ 329 million non-recurring, non-cash tax expense related to the remeasurement of UK deferred tax liabilities, as discussed below.

In fiscal 2021 and fiscal 2020, the effective income tax rate was 23 % and 21 %, respectively.

The effective tax rate in fiscal 2020 differs from the effective tax rate in fiscal 2019 mainly due to a $ 329 million non-recurring, non-cash tax expense related to the remeasurement of UK deferred tax liabilities, as a result of the enactment of UK legislation on July 22, 2020 that repealed the previous tax rate reduction from 19% to 17% that was effective April 1, 2020.

The effective tax rate in fiscal 2021 differs from the effective tax rate in fiscal 2020 primarily due to the following:

• during fiscal 2021, a $ 1.0 billion non-recurring, non-cash tax expense related to the remeasurement of UK deferred tax liabilities, as discussed above;

• during fiscal 2021, $ 255 million of tax benefits recognized as a result of the conclusion of audits by taxing authorities;

• during fiscal 2020, a $ 329 million non-recurring, non-cash tax expense related to the remeasurement of UK deferred tax liabilities.

Current income taxes receivable at September 30, 2022 and 2021 of $ 190 million and $ 83 million, respectively, were included in prepaid expenses and other current assets.

Non-current income taxes receivable at September 30, 2021 and 2020 of $ 974 million and $ 988 million, respectively, were included in other assets.

Non-current income taxes receivable at September 30, 2022 and 2021 of $ 1.0 billion and $ 974 million, respectively, were included in other assets.

Income taxes payable at September 30, 2022 and 2021 of $ 365 million and $ 325 million, respectively, were included in accrued liabilities.

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Effective October 1, 2008 through September 30, 2023, it is subject to a tax incentive which is conditional upon meeting certain business operations and employment thresholds in Singapore.

The tax incentive decreased Singapore tax by $ 273 million , $ 280 million and $ 324 million, and the gross benefit of the tax incentive on diluted earnings per share was $ 0.12 , $ 0.13 and $ 0.14 in fiscal 2021, 2020 and 2019, respectively.

In accordance with Accounting Standards Codification 740—Income Taxes , the Company is required to inventory, evaluate and measure all uncertain tax positions taken or to be taken on tax returns, and to record liabilities for the amount of such positions that may not be sustained, or may only partially be sustained, upon examination by the relevant taxing authorities.

At September 30, 2021, 2020, and 2019, the Company’s total gross unrecognized tax benefits were $ 2.5 billion, $ 2.6 billion and $ 2.2 billion, respectively, exclusive of interest and penalties described below.

Included in the $ 2.5 billion, $ 2.6 billion and $ 2.2 billion are $ 1.3 billion, $ 1.6 billion and $ 1.4 billion of unrecognized tax benefits, respectively, that if recognized, would reduce the effective tax rate in a future period.

In fiscal 2022, 2021 and 2020, the tax incentive decreased Singapore tax by $ 362 million , $ 273 million and $ 280 million, and the gross benefit of the tax incentive on diluted earnings per share was $ 0.17 , $ 0.12 and $ 0.13 , respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2022

The Company is required to inventory, evaluate and measure all uncertain tax positions taken or to be taken on tax returns, and to record liabilities for the amount of such positions that may not be sustained, or may only partially be sustained, upon examination by the relevant taxing authorities.

At September 30, 2022, 2021 and 2020, the Company’s total gross unrecognized tax benefits were $ 2.7 billion, $ 2.5 billion and $ 2.6 billion, respectively, exclusive of interest and penalties described below.

Included in the $ 2.7 billion, $ 2.5 billion and $ 2.6 billion are $ 1.3 billion, $ 1.3 billion and $ 1.6 billion of unrecognized tax benefits, respectively, that if recognized, would reduce the effective tax rate in a future period.

A reconciliation of beginning and ending unrecognized tax benefits by fiscal year is as follows:

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In fiscal 2022, 2021 and 2020, the Company recognized $ 15 million, $ 1 million and $ 68 million of net interest expense, respectively, related to uncertain tax positions.

In fiscal 2021, 2020 and 2019, the Company accrued penalties related to uncertain tax positions of $ 3 million, $ 4 million and $ 5 million, respectively.

At September 30, 2021 and 2020, the Company had accrued interest of $ 233 million, and accrued penalties of $ 34 million and $ 31 million, respectively, related to uncertain tax positions included in other long-term liabilities in its consolidated balance sheets.

In fiscal 2022, the Company reversed accrued penalties of $ 31 million and in fiscal 2021 and 2020, the Company accrued penalties of $ 3 million and $ 4 million, respectively, related to uncertain tax positions.

At September 30, 2022 and 2021, the Company had accrued interest of $ 238 million and $ 233 million, and accrued penalties of $ 3 million and $ 34 million, respectively, related to uncertain tax positions included in other long-term liabilities in its consolidated balance sheets.

The Company’s U.S.

federal income tax returns for fiscal 2013 through 2018 and refund claims filed for fiscal 2008 through 2012 are currently under examination.

For fiscal 2008 through 2015, one unresolved issue related to an income tax deduction remains.

During fiscal 2022, the Company completed the administrative appeals process for this issue without reaching a settlement with the Internal Revenue Service (IRS).

The Company is currently evaluating its next steps.

The Company’s California income tax returns for fiscal 2012 through 2015 and refund claims filed for fiscal 2006 through 2011 are currently under examination.

Except for the refund claims, the federal and California statutes of limitations have expired for fiscal years prior to 2012.

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 India tax authorities completed the assessment of the Company’s income tax returns for the taxable years falling within the period from fiscal 2010 to 2019, and made certain adjustments.

The Company objected to these adjustments and filed appeals to the appellate authorities.

While the timing and outcome of the final resolution of these appeals are uncertain, the Company believes that its income tax provision adequately reflects its income tax obligations in India.

The Company is also subject to examinations by various state and foreign tax authorities.

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As such, it is not reasonably possible to estimate the impact that the final outcomes could have on the Company’s unrecognized tax benefits in the next 12 months.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2022

Note 20—Legal Matters

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Some of these proceedings involve complex claims that are subject to substantial uncertainties and unascertainable damages.

Accordingly, except as disclosed, the Company has not established reserves or ranges of possible loss related to these proceedings, as at this time in the proceedings, the matters do not relate to a probable loss and/or the amount or range of losses are not reasonably estimable.

For those proceedings where a loss is determined to be only reasonably possible or probable but not estimable, the Company has disclosed the nature of the claim.

Additionally, unless otherwise disclosed below with respect to these proceedings, the Company cannot provide an estimate of the possible loss or range of loss.

Although the Company believes that it has strong defenses for the litigation and regulatory proceedings described below, it could, in the future, incur judgments or fines or enter into settlements of claims that could have a material adverse effect on the Company’s financial position, results of operations or cash flows.

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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—(Continued)

September 30, 2021

The following table summarizes the activity related to accrued litigation by fiscal year:

The following table summarizes the activity related to accrued litigation:

(in millions)

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Provision for covered legal matters 885 125

Reestablishment of prior accrual related to interchange multidistrict litigation — 467

Payments for legal matters ( 418 ) ( 60 )

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covered litigation and a charge to the litigation provision are recorded when a loss is deemed to be probable and reasonably estimable.

In making this determination, the Company evaluates available information, including but not limited to actions taken by the litigation committee.

In making this determination, the Company evaluates available information, including but not limited to actions taken by the Company’s litigation committee.

The total accrual related to the U.S.

covered litigation could be either higher or lower than the escrow account balance.

See further discussion below under Interchange Multidistrict Litigation (MDL) – Individual Merchant Actions and Note 5—U.S.

See further discussion below under U.S.

Covered Litigation and Note 5—U.S.

and Europe Retrospective Responsibility Plans.

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

covered litigation by fiscal year:

covered litigation:

(in millions)

Balance at beginning of period $ 881 $ 888

Reestablishment of prior accrual related to interchange multidistrict litigation — 467

Provision for interchange multidistrict litigation 861 —

Payments for U.S.

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Balance at end of period $ 1,441 $ 881

During fiscal 2022, the Company recorded additional accruals of $ 861 million and deposited $ 850 million into the U.S.

litigation escrow account to address claims of certain merchants who opted out of the Amended Settlement Agreement (as described herein).

covered litigation accrual balance is consistent with the Company’s best estimate of its share 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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2022

Accrual Summary—VE Territory Covered Litigation

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and Europe Retrospective Responsibility Plans .

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

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

(in millions)

Balance at beginning of period $ 102 $ 21

Accrual for VE territory covered litigation 125 26

Provision for VE territory covered litigation 24 125

Payments for VE territory covered litigation ( 115 ) ( 44 )

Balance at end of period $ 11 $ 102

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2021

Covered Litigation

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The Judicial Panel on Multidistrict Litigation issued an order transferring the cases to the U.S.

District Court for the Eastern District of New York for coordination of pre-trial proceedings in MDL 1720.

District Court for the Eastern District of New York (Court) for coordination of pre-trial proceedings in MDL 1720.

A group of purported class plaintiffs subsequently filed amended and supplemental class complaints.

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Visa Inc., Visa U.S.A., Visa International, Mastercard Incorporated, Mastercard International Incorporated, various U.S.

financial institution defendants, and the class plaintiffs signed a settlement agreement (the “2012 Settlement Agreement”) to resolve the class plaintiffs’ claims.

financial institution defendants, and the class plaintiffs signed a settlement agreement (2012 Settlement Agreement) to resolve the class plaintiffs’ claims.

Pursuant to the 2012 Settlement Agreement, the Company deposited approximately $ 4.0 billion from the U.S.

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and against various transaction fees, including the fixed acquirer network fee, as well as attorneys’ fees.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2022

On September 17, 2018, Visa, Mastercard, and certain U.S.

financial institutions reached an agreement with plaintiffs purporting to act on behalf of the putative Damages Class to resolve all Damages Class claims (the “Amended Settlement Agreement”), subject to court approval.

financial institutions reached an agreement with plaintiffs purporting to act on behalf of the putative Damages Class to resolve all Damages Class claims (Amended Settlement Agreement).

The Amended Settlement Agreement supersedes the 2012 Settlement Agreement and includes, among other terms, a release from participating class members for liability arising out of conduct alleged by the Damages Class in the litigation, including claims that accrue no later than five years after the Amended Settlement Agreement becomes final.

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Following a motion by the Damages Class plaintiffs for final approval of the Amended Settlement Agreement, certain merchants in the proposed settlement class objected to the settlement and/or submitted requests to opt out of the settlement class.

On December 13, 2019, the district court granted final approval of the Amended Settlement Agreement relating to claims by the Damages Class, which was subsequently appealed.

On December 13, 2019, the district court granted final approval of the Amended Settlement Agreement, which was subsequently appealed.

Based on the percentage of class members (by payment volume) that opted out of the class, $ 700 million was returned to defendants.

Visa’s portion of the takedown payment was calculated to be approximately $ 467 million, and upon receipt, was deposited into the U.S.

litigation escrow account with a corresponding increase in accrued litigation to address opt-out claims.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2021

Visa’s portion of the takedown payment, approximately $ 467 million, was deposited into the U.S.

litigation escrow account.

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.

On May 29, 2020, a complaint was filed by Old Jericho Enterprise, Inc.

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Each of these complaints alleges violations of the antitrust laws of those jurisdictions and seeks recovery for plaintiffs as indirect purchasers.

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

To the extent these plaintiffs’ claims are not released by the Am ended Settlement Agreement, Visa believes they are covered by the U.S.

Retrospective Responsibility Plan.

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financial institution defendants in MDL 1720 filed complaints against certain merchants in the Eastern District of New York seeking, in part, a declaration that Visa’s conduct did not violate federal or state antitrust laws.

The individual merchant actions described in this section have been either assigned to the judge presiding over MDL 1720, or have been transferred or are being considered for transfer by the Judicial Panel on Multidistrict Litigation for inclusion in MDL 1720.

The individual merchant actions described in this section have been either assigned to the judge presiding over MDL 1720, have been transferred, or are being considered for transfer by the Judicial Panel on Multidistrict Litigation for inclusion in MDL 1720.

These individual merchant actions are U.S.

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and Europe Retrospective Responsibility Plans.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2022

Visa has reached settlements with a number of merchants representing approximately 58 % of the Visa-branded payment card sales volume of merchants who opted out of the Amended Settlement Agreement with the Damages Class plaintiffs.

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Plaintiffs in certain of the individual merchant actions served motions for partial summary judgment.

On October 9, 2022, defendants’ motion for summary judgment regarding damages for EMV-related chargebacks was denied.

The Company believes it has substantial defenses to the claims asserted in the putative class actions and individual merchant actions, but the final outcome of individual legal claims is inherently unpredictable.

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and Europe Retrospective Responsibility Plans , judgments or settlements that require the Company to change its business practices, rules, or contractual commitments could adversely affect the Company’s financial results.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2021

VE Territory Covered Litigation

Europe Merchant Litigation

Since July 2013, in excess of 750 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.

Since July 2013, proceedings have been commenced by more than 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) against Visa Europe, Visa Inc.

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

They seek damages for alleged anti-competitive conduct in relation to one or more of the following types of interchange fees for credit and debit card transactions:

UK domestic, Irish domestic, other European domestic, intra-European Economic Area and/or other inter-regional.

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

and other Visa subsidiaries have settled the claims asserted by over 150 Merchants, leaving more than 550 Merchants with outstanding claims.

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

More than 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.

As of the filing date, Visa has settled claims of over 150 Merchants, leaving more than 700 Merchants with pending or threatened claims.

While the amount of interchange being challenged could be substantial, these claims have not yet been filed and their full scope is not yet known.

The Company has learned that several additional European entities have indicated that they may also bring similar claims and the Company anticipates additional claims in the future.

A trial took place from November 2016 to March 2017, relating to claims asserted by only one Merchant.

In judgments published in November 2017 and February 2018, the court found as to that Merchant that Visa’s UK domestic interchange did not restrict competition, but that if it had been found to be restrictive it would not be exemptible under applicable law.

The Company has learned that several additional European entities have indicated they may also bring similar claims, and the Company anticipates additional claims in the future.

A trial took place from November 2016 to March 2017, relating to claims asserted by one Merchant.

In judgments published in November 2017 and February 2018, the court found as to that Merchant that Visa’s UK domestic interchange did not restrict competition, but that if it had been found to restrict competition, it would not be exemptible under applicable law.

On July 4, 2018, the Court of Appeal overturned the lower court’s rulings, finding that Visa’s UK domestic interchange restricted competition and the question of whether Visa’s UK domestic interchange was exempt from the finding of restriction under applicable law had been incorrectly decided.

Following an appeal to the Supreme Court of the United Kingdom, on June 17, 2020, the Supreme Court found that Visa’s UK domestic interchange restricted competition under applicable competition law.

On September 30, 2021, Visa reached a confidential settlement agreement resolving the plaintiff’s claims.

Certain 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.

On September 30, 2021, Visa reached a confidential settlement agreement resolving one Merchant’s claims.

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 October 4, 2022, the UK Court of Appeal affirmed the CAT’s ruling.

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 since 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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2022

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.

The full scope of potential damages is not yet known because not all Merchant claims have been served and Visa has substantial defenses.

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The motion asserts that interchange fees on cross-border transactions in Israel and the Honor All Cards rule are anti-competitive and seeks damages and injunctive relief.

On July 3, 2022, Visa filed a motion challenging jurisdiction.

Other Litigation

Canadian Merchant Litigation

Beginning in December 2010, a number of class action lawsuits were filed in Quebec, British Columbia, Ontario, Saskatchewan and Alberta against Visa Canada, Mastercard and ten financial institutions on behalf of merchants that accept payment by Visa and/or Mastercard credit cards.

The actions alleged a violation of Canada’s price-fixing law and various common law claims based on separate Visa and Mastercard conspiracies in respect of default interchange and certain of the networks’ rules.

In June 2017, Visa and Mastercard reached settlements with the plaintiffs.

Courts in each of the five provinces approved the settlements and appeals of the decisions approving the settlements were rejected.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2021

ATM Access Fee Litigation

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Plaintiffs seek treble damages, restitution, injunctive relief, and attorneys’ fees where available under federal and state law, including under Section 1 of the Sherman Act and consumer protection statutes.

On September 20, 2019, plaintiffs in both cases filed motions for class certification.

On August 4, 2021, the district court granted plaintiffs’ motion for class certification in each case, and on October 1, 2021, the U.S.

Court of Appeals for the District of Columbia Circuit granted defendants’ motion for leave to appeal the district court’s decision.

On November 12, 2021, in the case in which the three financial institutions were named, the district court granted plaintiffs’ motion for preliminary approval of a class action settlement with those institutions.

On August 8, 2022, in the case in which the three financial institutions were named, the district court granted plaintiffs’ motion for final approval of a class action settlement with those institutions and entered final judgments of dismissal as to those institutions.

Department of Justice Civil Investigative Demand ( 2012 )

On March 13, 2012, the Antitrust Division of the United States Department of Justice (the “Division”) issued a Civil Investigative Demand, or “CID,” to Visa Inc.

On March 13, 2012, the Antitrust Division of the United States Department of Justice (Division) issued a Civil Investigative Demand, or “CID”, to Visa Inc.

seeking documents and information regarding a potential violation of Section 1 or 2 of the Sherman Act, 15 U.S.C.

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On November 25, 2014, Pulse Network LLC filed suit against Visa Inc.

in federal district court in Texas.

Pulse alleges that Visa has, among other things, monopolized and attempted to monopolize debit card network services markets.

Pulse seeks unspecified treble damages, attorneys’ fees and injunctive relief, including to enjoin the fixed acquirer network fee structure, Visa’s conduct regarding PIN-Authenticated Visa Debit and Visa agreements with merchants and acquirers relating to debit acceptance.

On August 31, 2018, the court granted Visa’s motion for summary judgment, finding that Pulse did not have standing to pursue its claims.

Pulse appealed the district court’s summary judgment decision to the U.S.

Court of Appeals for the Fifth Circuit.

in federal district court in Texas, alleging that Visa has, among other things, monopolized and attempted to monopolize debit card network services markets.

On August 29, 2022, Pulse filed an amended complaint, which makes similar allegations and seeks unspecified treble damages, attorneys’ fees and injunctive relief, including to enjoin the fixed acquirer network fee structure, and Visa’s agreements relating to debit with issuers, acquirers and merchants.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2022

EMV Chip Liability Shift

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who have been subjected to the “Liability Shift” since October 2015.

Plaintiffs claim that the so-called “Liability Shift” violates Sections 1 and 3 of the Sherman Act and certain state laws, and seek treble damages, injunctive relief and attorneys’ fees.

Plaintiffs claim that the “Liability Shift” violates Sections 1 and 3 of the Sherman Act and certain state laws, and seek treble damages, injunctive relief and attorneys’ fees.

EMVCo and the financial institution defendants were dismissed, and the matter was subsequently transferred to the U.S.

1 unchanged sentence

On August 28, 2020, the district court granted plaintiffs’ motion for class certification.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2021

Australian Competition & Consumer Commission

On July 12, 2019, the Australian Competition & Consumer Commission (ACCC) informed Visa that the ACCC had commenced an investigation into certain agreements and interchange fees relating to Visa Debit.

On March 9, 2021, the ACCC accepted an undertaking by Visa to resolve the investigation.

The investigation is closed.

Federal Trade Commission Civil Investigative Demand (Formerly Voluntary Access Letter)

On November 4, 2019, the Bureau of Competition of the United States Federal Trade Commission (the “Bureau”) requested that Visa provide, on a voluntary basis, documents and information for an investigation as to whether Visa’s actions inhibited merchant choice in the selection of debit payments networks in potential violation of the Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act.

On June 9, 2020, the Federal Trade Commission issued a Civil Investigative Demand to Visa requesting additional documents and information, and Visa is cooperating with the Bureau.

Federal Trade Commission Civil Investigative Demand

On November 4, 2019, the Bureau of Competition of the United States Federal Trade Commission (Bureau) requested that Visa provide, on a voluntary basis, documents and information relating to an investigation as to whether Visa’s actions inhibited merchant choice in the selection of debit payments networks in potential violation of the Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act.

On June 9, 2020, the Federal Trade Commission (FTC) issued a Civil Investigative Demand, or “CID”, to Visa requesting additional documents and information.

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

Euronet Litigation

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and Mastercard Incorporated, and certain of their subsidiaries, breach various competition laws.

Euronet seeks damages, costs, and injunctive relief to prevent the defendants from enforcing the aforementioned rules.

Euronet seeks damages, costs, and injunctive relief to prevent the defendants from enforcing these rules.

Trial has been scheduled for a date on or after October 2, 2023.

European Commission Staged Digital Wallets Investigation

On June 26, 2020, the European Commission (“EC”) informed Visa that it has opened a preliminary investigation into Visa’s rules regarding staged digital wallets and issued a request for information regarding such rules.

Visa is cooperating with the EC.

On November 5, 2020, the U.S.

Department of Justice filed a complaint in the U.S.

District Court for the Northern District of California seeking a permanent injunction to prevent Visa from acquiring Plaid Inc., alleging that the proposed acquisition would substantially lessen competition in violation of Section 7 of the Clayton Act and would constitute monopolization under Section 2 of the Sherman Act.

The case was dismissed on January 12, 2021.

On June 26, 2020, the European Commission (EC) informed Visa that it opened a preliminary investigation into Visa’s rules regarding staged digital wallets and issued a request for information regarding such rules.

Visa is cooperating with the EC in connection with the investigation.

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 were sought.

The claims were withdrawn in August 2021.

Beginning in December 2021, Visa was served with claims in Germany brought by German 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 the majority seek damages.

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

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.

Department of Justice (the Division) issued a Civil Investigative Demand, or “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.

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

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 October 18, 2021, Visa filed a motion to dismiss the complaint.

Following an initial class action complaint filed on July 9, 2021, an amended class action complaint was filed on December 6, 2021 against Visa in the U.S.

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

The amended complaint

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2022

asserted 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 September 16, 2022, plaintiffs filed a second amended complaint asserting the same claims, and on November 7, 2022, Visa filed a motion to dismiss the second amended complaint.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosures

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data