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Item 2. Management’s Discussion and Analysis

2023-01-27 compared with 2022-07-28 · 65 added, 179 removed, 238 unchanged (51% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

This management’s discussion and analysis provides a review of the results of operations, financial condition and the liquidity and capital resources of Visa Inc.

This management’s discussion and analysis provides a review of the results of operations, financial condition and liquidity and capital resources of Visa Inc.

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

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This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the U.S.

Private Securities Litigation Reform Act of 1995 that relate to, among other things, the impact on our future financial position, results of operations and cash flows as a result of the invasion of Ukraine by Russia;

the ongoing effects of the COVID-19 pandemic, as well as the reopening of borders and resumption of international travel;

the ongoing effects of the COVID-19 pandemic, including the reopening of borders and resumption of international travel;

prospects, developments, strategies and growth of our business;

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All statements other than statements of historical fact could be forward-looking statements, which speak only as of the date they are made, are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, many of which are beyond our control and are difficult to predict.

We describe risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, any of these forward-looking statements in our SEC filings, including our Annual Report on Form 10-K, for the year ended September 30, 2021, and our subsequent reports on Forms 10-Q and 8-K.

We describe risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, any of these forward-looking statements in our SEC filings, including our Annual Report on Form 10-K, for the year ended September 30, 2022, and any subsequent reports on Forms 10-Q and 8-K.

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

Visa is a global payments technology company that facilitates global commerce and money movement across more than 200 countries and territories among a global network of consumers, merchants, financial institutions and government entities through innovative technologies.

We provide transaction processing services (primarily authorization, clearing and settlement) to our financial institutions and merchants through VisaNet, our advanced transaction processing network.

Visa is a global payments technology company that facilitates global commerce and money movement across more than 200 countries and territories among a global set of consumers, merchants, financial institutions and government entities through innovative technologies.

We provide transaction processing services (primarily authorization, clearing and settlement) to our financial institution and merchant clients through VisaNet, our advanced transaction processing network.

We offer products and solutions that facilitate secure, reliable and efficient money movement for all participants in the ecosystem.

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Three Months Ended

June 30, Nine Months Ended

(in millions, except percentages and per share data)

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During the quarter ended March 31, 2022, economic sanctions were imposed on Russia by the U.S., European Union, United Kingdom and other jurisdictions and authorities, impacting Visa and its clients.

We announced in March 2022 that we were suspending our operations in Russia.

As a result, we are no longer generating revenue from domestic and cross-border activities related to Russia.

Since 2015, domestic transactions have been processed by Russia’s state-owned payments operator, National Payment Card System.

With respect to cross-border activities, all transactions initiated with Visa cards issued by financial institutions outside Russia no longer work within Russia, and all transactions on cards issued in Russia no longer work outside the country.

Furthermore, during the quarter ended March 31, 2022 we deconsolidated our Russian subsidiary, as required under U.S.

For the nine months ended June 30, 2022 and full year fiscal 2021, total net revenues from Russia, including revenues driven by domestic as well as cross-border activities, were approximately 3% and 4% of our consolidated net revenues, respectively.

With respect to Russia's invasion of Ukraine, our priority is ensuring the safety and security of our colleagues and their families who are directly impacted.

We are in close contact with those in the region and are providing ongoing support to our colleagues.

As the effects of the evolving COVID-19 pandemic continue, our priority remains the safety of our employees, clients and the communities in which we live and operate.

We are taking a phased approach to reopening our offices, with the return to office of our U.S.

employees in April 2022 in a new hybrid model of flexible work.

The ongoing effects of Russia’s invasion of Ukraine and COVID-19 are difficult to predict due to numerous uncertainties identified in Part II, Item 1A “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 .

In March 2022, we suspended our operations in Russia and as a result, are no longer generating revenue from domestic and cross-border activities related to Russia.

For the three months ended December 31, 2021, total net revenues from Russia, including revenues driven by domestic as well as cross-border activities, was approximately 4% of our consolidated net revenues.

The continuing effects of the war in Ukraine are difficult to predict due to numerous uncertainties identified in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended September 30, 2022 .

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

Highlights for the first nine months of fiscal 2022.

For the three and nine months ended June 30, 2022, net revenues increased 19% and 23% over the prior-year comparable periods, primarily due to the growth in nominal cross-border volume, nominal payments volume and processed transactions, partially offset by higher client incentives.

During the three and nine months ended June 30, 2022, exchange rate movements and our hedging

program negatively impacted our net revenues growth by approximately three percentage points and two percentage points, respectively.

For the three months ended June 30, 2022, GAAP operating expenses increased 51% over the prior-year comparable period primarily due to higher expenses for litigation provision and personnel.

For the nine months ended June 30, 2022, GAAP operating expenses increased 29% over the prior-year comparable period primarily due to higher expenses related to litigation provision and personnel.

Highlights for the first quarter of fiscal 2023.

For the three months ended December 31, 2022, net revenues increased 12% over the prior-year comparable period, primarily due to the growth in nominal cross-border volume, processed transactions and nominal payments volume, partially offset by higher client incentives.

During the three months ended December 31, 2022, exchange rate movements negatively impacted our net revenues growth by approximately three percentage points.

For the three months ended December 31, 2022, GAAP operating expenses increased 25% over the prior-year comparable period primarily due to higher expenses related to personnel and litigation provision.

See Results of Operations—Operating Expenses below for further discussion.

During the three and nine months ended June 30, 2022, exchange rate movements positively impacted our operating expense growth by approximately two percentage points.

For the three months ended June 30, 2022, non-GAAP operating expenses increased 15% over the prior-year comparable period primarily due to higher expenses for personnel and general and administrative.

For the nine months ended June 30, 2022, non-GAAP operating expenses increased 15% over the prior year comparable period primarily due to higher expenses related to personnel and marketing.

Senior notes.

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

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

Acquisitions.

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

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

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

See Note 2—Acquisitions to our unaudited consolidated financial statements.

During the three months ended December 31, 2022, exchange rate movements positively impacted our operating expense growth by approximately one-and-a-half percentage points.

For the three months ended December 31, 2022, non-GAAP operating expenses increased 15% over the prior year comparable period primarily due to higher personnel and general and administrative expenses.

Interchange multidistrict litigation.

During the nine months ended June 30, 2022, we recorded additional accruals of $861 million to address claims associated with the interchange multidistrict litigation.

During the three months ended December 31, 2022, we recorded an additional accrual of $341 million to address claims associated with the interchange multidistrict litigation.

We also made deposits of $350 million into the U.S.

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Common stock repurchases.

In December 2021, our board of directors authorized a $12.0 billion share repurchase program .

During the nine months ended June 30, 2022, we repurchased 46 million shares of our class A common stock in the open market for $9.5 billion.

As of June 30, 2022, our repurchase program had remaining authorized funds of $7.3 billion.

In October 2022, our board of directors authorized a $12.0 billion share repurchase program .

Previously, in December 2021, our board of directors authorized a $12.0 billion share repurchase program.

During the three months ended December 31, 2022, we repurchased 16 million shares of our class A common stock in the open market for $3.1 billion.

As of December 31, 2022, our repurchase programs had remaining authorized funds of $14.1 billion.

See Note 8—Stockholders’ Equity to our unaudited consolidated financial statements.

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• Litigation provision.

During the three and nine months ended June 30, 2022, we recorded additional accruals to address claims associated with the interchange multidistrict litigation of $716 million and $861 million, respectively, and related tax benefit of $159 million and $191 million, respectively, determined by applying applicable tax rates.

During the three months ended December 31, 2022 and 2021, we recorded an additional accrual to address claims associated with the interchange multidistrict litigation of $341 million and $145 million, respectively, and related tax benefit of $76 million and $32 million, respectively, determined by applying applicable tax rates.

Under the U.S.

retrospective responsibility plan, we recover the monetary liabilities related to the U.S.

covered litigation through a downward adjustment to the conversion rate of our class B common stock to shares of class A common stock.

covered litigation through a downward adjustment to the rate at which shares of our class B common stock convert into shares of class A common stock.

See Note 4—U.S.

and Europe Retrospective Responsibility Plans and Note 12—Legal Matters to our unaudited consolidated financial statements.

• Russia-Ukraine charges.

During the nine months ended June 30, 2022, we recorded a loss within general and administrative expense of $35 million from the deconsolidation of our Russian subsidiary.

See Note 1—Summary of Significant Accounting Policies to our unaudited consolidated financial statements.

We also incurred charges of $25 million in personnel expense as a result of steps taken to support our employees in Russia and Ukraine.

We have excluded these amounts and the related tax benefit of $4 million, determined by applying applicable tax rates, as they are one-time charges and do not reflect the underlying performance of our business.

• Remeasurement of deferred tax balances.

During the three and nine months ended June 30, 2021, in connection with the UK enacted legislation on June 10, 2021 that will increase the tax rate from 19% to 25%, effective April 1, 2023, we remeasured our net deferred tax liabilities, resulting in the recognition of a non-recurring, non-cash income tax expense of $1.0 billion.

• Indirect taxes .

During the nine months ended June 30, 2021, we recognized a one-time charge within general and administrative expense of $152 million, and related tax benefit of $40 million determined by applying applicable tax rates.

This charge is to record our estimate of probable additional indirect taxes, related to prior periods, for which we could be liable as a result of certain changes in applicable law.

This one-time charge is not representative of our ongoing operations.

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

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GAAP, to our respective non-GAAP financial measures:

Three Months Ended June 30, 2022

Three Months Ended December 31, 2022

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

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Non-GAAP $ 2,439 $ (7) $ 909 16.5 % $ 4,581 $ 2.18

Nine Months Ended June 30, 2022

Three Months Ended December 31, 2021

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

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Litigation provision (145) — 32 113 0.05

Russia-Ukraine charges (60) — 4 56 0.03

Non-GAAP $ 2,115 $ (110) $ 933 19.3 % $ 3,901 $ 1.81

Three Months Ended June 30, 2021

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

Income Diluted Earnings Per Share (1)

(in millions, except percentages and per share data)

As reported $ 2,066 $ 325 $ 1,814 41.3 % $ 2,575 $ 1.18

(Gains) losses on equity investments, net — (439) (99) (340) (0.16)

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

Acquisition-related costs (5) — 1 4 —

Remeasurement of deferred tax balances — — (1,007) 1,007 0.46

Non-GAAP $ 2,048 $ (114) $ 712 17.9 % $ 3,256 $ 1.49

Nine Months Ended June 30, 2021

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

Income Diluted Earnings Per Share (1)

(in millions, except percentages and per share data)

As reported $ 6,057 $ 276 $ 3,038 25.8 % $ 8,727 $ 3.98

(Gains) losses on equity investments, net — (611) (138) (473) (0.22)

Amortization of acquired intangible assets (38) — 9 29 0.01

Acquisition-related costs (13) — 3 10 —

Remeasurement of deferred tax balances — — (1,007) 1,007 0.46

Indirect taxes (152) — 40 112 0.05

Non-GAAP $ 5,854 $ (335) $ 1,945 17.1 % $ 9,412 $ 4.29

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

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International Visa Inc.

Three Months Ended March 31, (1)

Three Months Ended September 30, (1)

2022 2021 % Change (2)

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$ 1,635 $ 1,505 9 % $ 1,900 $ 1,958 (3 %) $ 3,535 $ 3,462 2 %

International Visa Inc.

Nine Months Ended March 31, (1)

2022 2021 % Change (2)

(in billions, except percentages)

Nominal payments volume

Consumer credit $ 1,492 $ 1,175 27 % $ 2,018 $ 1,778 14 % $ 3,510 $ 2,953 19 %

Consumer debit (3)

1,927 1,718 12 % 2,081 1,782 17 % 4,008 3,500 15 %

Commercial (4)

637 501 27 % 366 296 24 % 1,003 797 26 %

Total nominal payments volume (2)

$ 4,057 $ 3,394 20 % $ 4,465 $ 3,855 16 % $ 8,522 $ 7,249 18 %

Cash volume (5)

477 466 2 % 1,475 1,442 2 % 1,952 1,908 2 %

Total nominal volume (2),(6)

$ 4,533 $ 3,860 17 % $ 5,940 $ 5,297 12 % $ 10,473 $ 9,157 14 %

The following table presents the change in nominal and constant payments and cash volume:

International Visa Inc.

Ended March 31,

Nominal Constant (7)

Ended September 30,

Nominal Constant (7)

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

Therefore, service revenues reported for the three and nine months ended June 30, 2022 and 2021, respectively, were based on nominal payments volume reported by our financial institution clients for the three and nine months ended March 31, 2022 and 2021, respectively.

Therefore, service revenues reported for the three months ended December 31, 2022 and 2021, respectively, were based on nominal payments volume reported by our financial institution clients for the three months ended September 30, 2022 and 2021, respectively.

On occasion, previously presented volume information may be updated.

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Three Months Ended

June 30, Nine Months Ended

(in millions, except percentages)

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Three Months Ended

June 30, Nine Months Ended

(in millions, except percentages)

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Percentage changes are calculated based on unrounded numbers.

Net revenues increased during the three and nine-month comparable periods primarily due to the growth in nominal cross-border volume, nominal payments volume and processed transactions, partially offset by higher client incentives.

Net revenues increased primarily due to the growth in nominal cross-border volume, processed transactions and nominal payments volume, partially offset by higher client incentives.

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

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

During the three and nine months ended June 30, 2022, exchange rate movements and our hedging program negatively impacted our net revenues growth by approximately three percentage points and two percentage points, respectively.

During the three months ended December 31, 2022, exchange rate movements negatively impacted our net revenues growth by approximately three percentage points.

The following table presents the components of our net revenues:

Three Months Ended

June 30, Nine Months Ended

(in millions, except percentages)

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Percentage changes are calculated based on unrounded numbers.

• Service revenues increased primarily due to 14% and 18% growth in nominal payments volume during the three and nine-month comparable periods, respectively.

For the three-month comparable period, service revenues were partially offset by our suspension of operations in Russia as we recognized revenues from fiscal third quarter, based on fiscal second quarter payments volume, in fiscal second quarter.

• Data processing revenues increased primarily due to overall growth in processed transactions of 16% and 19% during the three and nine-month comparable periods, respectively, partially offset by our suspension of operations in Russia and unfavorable currency fluctuations.

• International transaction revenues increased primarily due to growth in nominal cross-border volumes, excluding transactions within Europe, of 38% and 42% during the three and nine-month comparable periods, respectively.

• Service revenues increased primarily due to 5% growth in nominal payments volume, despite the impact of our suspension of operations in Russia.

Service revenues also increased due to business mix, select pricing modifications and card benefits.

• Data processing revenues increased primarily due to overall growth in processed transactions of 10%, partially offset by our suspension of operations in Russia.

• International transaction revenues increased primarily due to growth in nominal cross-border volumes of 22%, excluding transactions within Europe.

International transaction revenues also increased due to volatility of a broad range of currencies and select pricing modifications.

• Other revenues increased primarily due to value added services revenues tied to marketing services, travel related card benefits, consulting revenues, other value added services and select pricing modifications.

• Client incentives increased primarily due to growth in payments volume during the three and nine-month comparable periods.

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

• Other revenues increased primarily due to value added services revenues tied to marketing and consulting services, acquisition-related revenues and select pricing modifications.

• Client incentives increased primarily due to growth in payments volume.

Operating Expenses

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Three Months Ended

June 30, Nine Months Ended

(in millions, except percentages)

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Depreciation and amortization

230 204 13 % 635 602 6 %

General and administrative

289 204 41 % 856 770 11 %

Litigation provision 717 (2) NM 865 2 NM

Litigation provision 341 148 130 %

Total operating expenses $ 2,846 $ 2,283 25 %

NM - Not meaningful

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

Percentage changes are calculated based on unrounded numbers.

Total operating expenses increased during the three months ended June 30, 2022 primarily due to a provision for U.S.

covered litigation, partially offset by a decrease in expenses due to the suspension of our operations in Russia.

In the nine months ended June 30, 2022, expenses increased as we lapped planned delays in spending in the first half of fiscal 2021 and invested in future growth and due to the provision for U.S.

covered litigation.

• Personnel expenses increased during the three and nine months ended June 30, 2022 primarily due to higher headcount and compensation, reflecting our strategy to invest in future growth, including acquisitions.

The increase during the nine months ended June 30, 2022 also included expenses incurred as a result of steps taken to support our employees in Russia and Ukraine.

• Marketing expenses increased during the three months ended June 30, 2022 primarily in support of a number of campaigns and client marketing.

In the nine months ended June 30, 2022, expenses increased as we lapped planned delays in spending in the first half of fiscal 2021 and increased spending in various campaigns, including the Beijing 2022 Olympics Winter Games, and client marketing.

• Professional fees increased during the three months ended June 30, 2022, reflecting higher investment in various corporate projects.

In the nine months ended June 30, 2022, expenses increased as we lapped planned delays in spending in the first half of fiscal 2021.

• Depreciation and amortization expenses increased during the three and nine months ended June 30, 2022 primarily due to additional depreciation and amortization from our acquisitions and on-going investments.

• General and administrative expenses increased during the three months ended June 30, 2022 primarily due to higher travel expenses, higher usage of travel related card benefits and the inclusion of expenses from our acquisitions.

In the nine months ended June 30, 2022, expenses increased primarily due to the suspension of our operations in Russia and deconsolidation of our Russian subsidiary, higher usage of travel related card benefits, higher travel expenses and the inclusion of expenses from our acquisitions, partially offset by one-time charge of indirect taxes in the prior year.

• Litigation provision increased during the three and nine months ended June 30, 2022 primarily due to additional accruals of $716 million and $861 million, respectively, related to the U.S.

• Personnel expenses increased primarily due to higher number of employees and compensation, reflecting our strategy to invest in future growth, including acquisitions.

• Marketing expenses increased primarily due to increased spending in various campaigns, including the FIFA World Cup 2022 TM and client marketing.

• Network and processing expenses decreased primarily due to the absence of fees associated with the processing of Russian domestic transactions as a result of our suspension of operations in Russia, partially offset by continued technology and processing network investments to support growth.

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

• General and administrative expenses increased primarily due to an increase in travel expenses, unfavorable foreign currency fluctuations, and higher usage of travel related card benefits.

• Litigation provision increased primarily due to an increase in accrual related to the U.S.

covered litigation.

See Note 5—U.S.

and Europe Retrospective Responsibility Plans and Note 13—Legal Matters to our unaudited consolidated financial statements.

See Note 12—Legal Matters to our unaudited consolidated financial statements.

Non-operating Income (Expense)

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Three Months Ended

June 30, Nine Months Ended

(in millions, except percentages)

Interest expense, net $ (111) $ (131) (15 %) $ (379) $ (388) (2 %)

Investment income and other (208) 456 (146 %) (79) 664 (112 %)

Interest expense $ (137) $ (134) 2 %

Investment income (expense) and other 24 255 (91 %)

Total non-operating income (expense) $ (113) $ 121 (194 %)

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Percentage changes are calculated based on unrounded numbers.

• Interest expense, net decreased in the three months ended June 30, 2022 primarily due to lower interest expense related to income taxes, partially offset by higher interest expense as a result of the issuance of debt in the three months ended June 30, 2022.

The decrease in the nine months ended June 30, 2022 was primarily driven by lower interest expense due to the timing of debt issuance.

• Investment income and other decreased in the three and nine months ended June 30, 2022 primarily due to losses on our equity investments.

• Interest expense increased primarily due to lower income from derivative instruments and higher interest expense related to the issuance of debt in fiscal 2022, partially offset by a discrete tax benefit recognized during the three months ended December 31, 2022.

• Investment income (expense) and other decreased primarily due to losses on our equity investments, partially offset by higher interest income on our cash and investments.

Effective Income Tax Rate

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Three Months Ended

June 30, Nine Months Ended

2022 2021 2022 2021

Effective income tax rate 16 % 19 %

The effective tax rates for the three and nine months ended June 30, 2022 differ from the effective tax rates for the same periods in the prior year primarily due to the following:

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

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

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

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

The difference in the effective tax rates is primarily due to a $142 million tax benefit related to prior years recognized during the three months ended December 31, 2022 due to the reassessment of an uncertain tax position as a result of new information obtained during an ongoing tax examination.

Liquidity and Capital Resources

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

Nine Months Ended

Three Months Ended

(in millions)

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Operating activities.

Cash provided by operating activities for the nine months ended June 30, 2022 was higher than the prior-year comparable period primarily due to growth in our underlying business, partially offset by higher client incentive payments.

Cash provided by operating activities for the three months ended December 31, 2022 was lower than the prior-year comparable period primarily due to higher incentive payments, partially offset by continued growth in our underlying business.

Investing activities.

Cash was used in investing activities for the nine months ended June 30, 2022 as compared to cash provided by investing activities during the prior-year comparable period primarily due to lower proceeds from sales and maturities of investment securities, combined with higher purchases of investment securities, and higher cash paid for acquisitions, net of cash and restricted cash acquired.

See Note 2—Acquisitions and Note 4—Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents to our unaudited consolidated financial statements.

Cash used in investing activities for the three months ended December 31, 2022 was lower than the prior-year comparable period primarily due to the absence of cash paid for acquisitions combined with cash received from the settlement of net investment hedge derivative instruments in the current year, partially offset by higher purchases, net of sales and maturities, of investment securities.

Financing activities.

Cash used in financing activities for the nine months ended June 30, 2022 was lower than the prior-year comparable period primarily due to proceeds received from the issuance of senior notes in the current year and the absence of the principal debt payment made in the prior year, partially offset by higher share repurchases and higher dividends paid.

Cash used in financing activities for the three months ended December 31, 2022 was higher than the prior-year comparable period primarily due to the principal debt payment upon maturity of our December 2022 senior notes and higher dividends paid, partially offset by lower share repurchases.

See Note 6—Debt and Note 8—Stockholders’ Equity to our unaudited consolidated financial statements .

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

Commercial paper program .

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

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

We had no outstanding obligations under the program as of June 30, 2022.

Senior notes.

In June 2022, we 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.

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

Uses of Liquidity

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Common stock repurchases.

During the nine months ended June 30, 2022, we repurchased shares of our class A common stock in the open market for $9.5 billion.

As of June 30, 2022, our repurchase program had remaining authorized funds of $7.3 billion.

During the three months ended December 31, 2022, we repurchased shares of our class A common stock in the open market for $3.1 billion.

As of December 31, 2022, our repurchase programs had remaining authorized funds of $14.1 billion.

See Note 8—Stockholders’ Equity to our unaudited consolidated financial statements.

During the nine months ended June 30, 2022, we declared and paid $2.4 billion in dividends to holders of our common and preferred stock.

On July 22, 2022, our board of directors declared a cash dividend in the amount 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 convertible participating preferred stock on an as-converted basis).

During the three months ended December 31, 2022, we declared and paid $945 million in dividends to holders of our common and preferred stock.

On January 24, 2023, our 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 convertible participating preferred stock on an as-converted basis).

See Note 8—Stockholders’ Equity to our unaudited consolidated financial statements.

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Senior notes .

Principal payments on our fixed-rate senior notes of $1.0 billion and $2.3 billion are due in September 2022 and December 2022, respectively, for which we have sufficient liquidity.

During the three months ended December 31, 2022, we repaid $2.25 billion of principal upon maturity of our December 2022 senior notes.

See Note 6—Debt to our unaudited consolidated financial statements.

During the nine months ended June 30, 2022, we deposited $850 million into the U.S.

During the three months ended December 31, 2022, we deposited $350 million into the U.S.

litigation escrow account to address claims associated with the interchange multidistrict litigation.

The balance of this account as of June 30, 2022 was $1.5 billion and is reflected as restricted cash in our consolidated balance sheets.

The balance of this account as of December 31, 2022 was $1.7 billion and is reflected as restricted cash in our consolidated balance sheets.

See Note 4—U.S.

and Europe Retrospective Responsibility Plans and Note 12—Legal Matters to our unaudited consolidated financial statements.

Acquisitions .

On December 20, 2021, we acquired Currencycloud for a total purchase consideration of $893 million (which includes the fair value of our previously held equity interest in Currencycloud), and on March 10, 2022, we acquired 100% of the share capital of Tink for $1.9 billion in cash.

See Note 2—Acquisitions to our unaudited consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

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

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

Subsequently, the FASB also issued amendments to this standard.

The amendments in the ASU are effective upon issuance through December 31, 2024.

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

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

The adoption of ASU 2020-04 and its subsequent amendments is not expected to have a material impact on our consolidated financial statements.

Quantitative and Qualitative Disclosures about Market Risk

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What changed 10-Q

Item 2. Management’s Discussion and Analysis