What changed in this filing

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Item 1. Financial Statements

2023-04-27 compared with 2023-01-27 · 175 added, 78 removed, 648 unchanged (28% of the section changed)

52 unchanged sentences

Three Months Ended

March 31, Six Months Ended

2023 2022 2023 2022

(in millions, except per share data)

36 unchanged sentences

Three Months Ended

March 31, Six Months Ended

2023 2022 2023 2022

(in millions)

6 unchanged sentences

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

3 ( 2 ) 5 ( 1 )

Income tax effect — — ( 1 ) —

10 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Three Months Ended December 31, 2022

Three Months Ended March 31, 2023

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

4 unchanged sentences

(in millions, except per share data)

Balance as of December 31, 2022 5 $ 1,981 1,881 $ 19,827 $ ( 28 ) $ 16,403 $ ( 1,259 ) $ 36,924

Net income 4,257 4,257

Other comprehensive income (loss), net of tax 269 269

VE territory covered losses incurred ( 7 ) ( 7 )

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

( 96 ) 2 96 —

Share-based compensation, net of forfeitures 223 223

Stock issued under equity plans 1 62 62

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

Cash dividends declared and paid, at a quarterly amount of $ 0.45 per class A common stock

( 941 ) ( 941 )

Repurchase of class A common stock ( 10 ) ( 107 ) ( 2,109 ) ( 2,216 )

Balance as of March 31, 2023 5 $ 1,885 1,874 $ 20,095 $ ( 35 ) $ 17,610 $ ( 990 ) $ 38,565

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

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

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—(Continued)

Six Months Ended March 31, 2023

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

Income Accumulated

Comprehensive

Income (Loss), Net Total

Shares Amount Shares Amount

(in millions, except per share data)

Balance as of September 30, 2022 5 $ 2,324 (1)

13 unchanged sentences

Repurchase of class A common stock ( 26 ) ( 275 ) ( 5,056 ) ( 5,331 )

Balance as of December 31, 2022 5 $ 1,981 (1)

Balance as of March 31, 2023 5 $ 1,885 (1)

1,874 $ 20,095 $ ( 35 ) $ 17,610 $ ( 990 ) $ 38,565

(1) As of December 31, 2022 and September 30, 2022, the book value of series A preferred stock was $ 723 million and $ 1.0 billion, respectively.

(1) As of March 31, 2023 and September 30, 2022, the book value of series A preferred stock was $ 627 million and $ 1.0 billion, respectively.

Refer to Note 4—U.S.

3 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—(Continued)

Three Months Ended December 31, 2021

Three Months Ended March 31, 2022

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

4 unchanged sentences

(in millions, except per share data)

Balance as of September 30, 2021 5 $ 3,080 (1)

Balance as of December 31, 2021 5 $ 2,995 1,916 $ 18,776 $ ( 111 ) $ 14,606 $ ( 72 ) $ 36,194

Net income 3,647 3,647

Other comprehensive income (loss), net of tax ( 333 ) ( 333 )

VE territory covered losses incurred ( 9 ) ( 9 )

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

Share-based compensation, net of forfeitures 190 190

Stock issued under equity plans 2 54 54

Restricted stock and performance-based shares settled in cash for taxes — (1)

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

( 802 ) ( 802 )

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

Balance as of March 31, 2022 5 $ 2,987 1,903 $ 18,876 $ ( 120 ) $ 14,651 $ ( 405 ) $ 35,989

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

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

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—(Continued)

Six Months Ended March 31, 2022

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

Income Accumulated

Comprehensive

Income (Loss), Net Total

Shares Amount Shares Amount

(in millions, except per share data)

Balance as of September 30, 2021 5 $ 3,080 1,932 $ 18,855 $ ( 133 ) $ 15,351 $ 436 $ 37,589

Net income 7,606 7,606

3 unchanged sentences

Recovery through conversion rate adjustment ( 29 ) 29 —

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

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

( 64 ) 1 64 —

6 unchanged sentences

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

Balance as of December 31, 2021 5 $ 2,995 (1)

1,916 $ 18,776 $ ( 111 ) $ 14,606 $ ( 72 ) $ 36,194

(1) As of December 31, 2021 and September 30, 2021, the book value of series A preferred stock was $ 430 million and $ 486 million, respectively.

Refer to Note 4—U.S.

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

Balance as of March 31, 2022 5 $ 2,987 1,903 $ 18,876 $ ( 120 ) $ 14,651 $ ( 405 ) $ 35,989

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

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Six Months Ended

(in millions)

24 unchanged sentences

Proceeds from maturities and sales 1,760 1,975

Acquisitions, net of cash acquired — ( 832 )

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

Purchases of other investments ( 70 ) ( 55 )

6 unchanged sentences

Dividends paid ( 1,886 ) ( 1,611 )

Proceeds from issuance of commercial paper — 300

Cash proceeds from issuance of class A common stock under equity plans 118 113

15 unchanged sentences

Organization.

and its subsidiaries (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).

Visa Inc., together with its subsidiaries (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 networks — 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.

17 unchanged sentences

Future actual results could differ materially from these estimates.

Recently Adopted Accounting Pronouncement.

In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-04, which provides optional expedients and exceptions for applying U.S.

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

Subsequently, the FASB also issued amendments to this standard.

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

During the quarter ended March 31, 2023 , the Company adopted certain optional expedients provided in this ASU in relation to contract modifications and hedge accounting.

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

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

3 unchanged sentences

Three Months Ended

March 31, Six Months Ended

2023 2022 2023 2022

(in millions)

6 unchanged sentences

Three Months Ended

March 31, Six Months Ended

2023 2022 2023 2022

(in millions)

25 unchanged sentences

litigation escrow account:

Three Months Ended

Six Months Ended

(in millions)

2 unchanged sentences

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

( 183 ) ( 262 )

Balance at end of period $ 1,616 $ 882

16 unchanged sentences

( 7 ) ( 7 ) 15

Balance as of December 31, 2022

Balance as of March 31, 2023

$ 453 $ 805 $ ( 35 )

5 unchanged sentences

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

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

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

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

3 unchanged sentences

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

December 31, 2022 September 30, 2022

March 31, 2023 September 30, 2022

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

10 unchanged sentences

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

(2) As of December 31, 2022, the as-converted value of preferred stock is calculated as the product of:

(2) As of March 31, 2023, the as-converted value of preferred stock is calculated as the product of:

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

12 unchanged sentences

2023 September 30,

2022 December 31,

2022 March 31,

2023 September 30,

3 unchanged sentences

$ 11,548 $ 11,736 $ — $ —

government-sponsored debt securities

Treasury securities

2 unchanged sentences

government-sponsored debt securities

— — 1,016 457

Treasury securities

12 unchanged sentences

Level 1 assets and liabilities.

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.

Money market funds, U.S.

Treasury securities and marketable equity 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.

6 unchanged sentences

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

December 31, 2022

March 31, 2023

Cost Gross Unrealized Fair

11 unchanged sentences

Debt securities with unrealized losses for less than 12 months and 12 months or greater were as follows:

December 31, 2022

March 31, 2023

Less Than 12 Months

22 unchanged sentences

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

The following table summarizes the total carrying value of the Company’s non-marketable equity securities held as of December 31, 2022 including cumulative unrealized gains and losses:

The following table summarizes the total carrying value of the Company’s non-marketable equity securities held as of March 31, 2023 including cumulative unrealized gains and losses:

(in millions)

3 unchanged sentences

Carrying amount, end of period $ 1,145

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

Unrealized gains and losses included in the carrying value of the Company’s non-marketable equity securities still held as of March 31, 2023 and 2022 were as follows:

Three Months Ended

March 31, Six Months Ended

2023 2022 2023 2022

(in millions)

1 unchanged sentence

Downward adjustments (including impairment) $ ( 89 ) $ ( 53 ) $ ( 89 ) $ ( 53 )

For the three months ended December 31, 2022 and 2021, the Company recognized net unrealized losses of $ 102 million and net unrealized gains of $ 172 million, respectively, on marketable and non-marketable equity securities still held as of quarter end.

For the three months ended March 31, 2023 and 2022, the Company recognized net unrealized losses of $ 82 million and $ 156 million, respectively, on marketable and non-marketable equity securities still held as of quarter end.

For the six months ended March 31, 2023 and 2022, the Company recognized net unrealized losses of $ 184 million and net unrealized gains of $ 16 million, respectively, on marketable and non-marketable equity securities still held as of quarter end.

Other Fair Value Disclosures

Debt instruments are measured at amortized cost on the Company’s unaudited consolidated balance sheets.

Debt instruments are measured at amortized cost on the Company’s consolidated balance sheets.

The fair value of the debt instruments, as provided by third-party pricing vendors, is based on quoted prices in active markets for similar, not identical, assets.

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

As of December 31, 2022, the carrying value and estimated fair value of debt was $ 20.5 billion and $ 18.4 billion, respectively.

As of March 31, 2023, the carrying value and estimated fair value of debt was $ 20.6 billion and $ 18.9 billion, respectively.

As of September 30, 2022, the carrying value and estimated fair value of debt was $ 22.5 billion and $ 19.9 billion, respectively.

Other financial instruments not measured at fair value.

As of December 31, 2022, the carrying values of settlement receivable and payable and customer collateral are an approximate fair value due to their generally short maturities.

As of March 31, 2023, the carrying values of settlement receivable and payable 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.

1 unchanged sentence

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

As of December 31, 2022, there were no impairment indicators.

The Company performed its annual impairment review of its indefinite-lived intangible assets and goodwill as of February 1, 2023, and concluded there was no impairment as of that date.

No recent events or changes in circumstances indicated that impairment existed as of March 31, 2023 .

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

45 unchanged sentences

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

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

During the six months ended March 31, 2023, the Company repaid $ 2.25 billion of principal upon maturity of its senior notes due December 2022.

Non-derivative Financial Instrument Designated as a Net Investment Hedge

During the three months ended December 31, 2022, the Company designated € 1.8 billion of the Euro-denominated fixed-rate senior notes (Euro Notes) issued in June 2022 as a hedge against a portion of the Company’s Euro-denominated net investment in Visa Europe.

As of December 31, 2022, all of the € 3.0 billion Euro Notes were designated as a net investment hedge.

During the six months ended March 31, 2023, the Company designated € 1.8 billion of the Euro-denominated fixed-rate senior notes (Euro Notes) issued in June 2022 as a hedge against a portion of the Company’s Euro-denominated net investment in Visa Europe.

As of March 31, 2023, all of the € 3.0 billion Euro Notes were designated as a net investment hedge.

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

5 unchanged sentences

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

During the three months ended December 31, 2022, the Company’s maximum daily settlement exposure was $ 123.5 billion and the average daily settlement exposure was $ 76.0 billion.

During the six months ended March 31, 2023, the Company’s maximum daily settlement exposure was $ 123.5 billion and the average daily settlement exposure was $ 75.0 billion.

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

11 unchanged sentences

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

December 31, 2022 September 30, 2022

March 31, 2023 September 30, 2022

Outstanding Conversion Rate Into

16 unchanged sentences

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

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

(3) Class A common stock shares outstanding reflect repurchases that settled on or before March 31, 2023 and September 30, 2022.

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

2 unchanged sentences

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

litigation escrow account for the three months ended December 31, 2022 and 2021.

Three Months Ended

litigation escrow account for the six months ended March 31, 2023 and 2022.

Six Months Ended

(in millions, except per share data)

6 unchanged sentences

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

Three Months Ended

December 31, 2022 Three Months Ended

December 31, 2021

Six Months Ended

March 31, 2023 Six Months Ended

March 31, 2022

Series B Series C Series B Series C

11 unchanged sentences

Three Months Ended

March 31, Six Months Ended

2023 2022 2023 2022

(in millions, except per share data)

Shares repurchased in the open market (1)

Average repurchase price per share (2)

Average repurchase cost per share (2)

$ 221.32 $ 210.18 $ 206.88 $ 210.26

1 unchanged sentence

$ 2,216 $ 2,949 $ 5,331 $ 7,053

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

(1) Shares repurchased in the open market reflect repurchases that settled during the three and six months ended March 31, 2023 and 2022, respectively.

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

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

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

Average repurchase cost per share and total cost are calculated based on unrounded numbers and include applicable taxes.

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

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

These authorizations have no expiration date.

As of December 31, 2022, the Company’s repurchase programs had remaining authorized funds of $ 14.1 billion.

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

The Company declared and paid dividends of $ 945 million and $ 809 million during the three months ended December 31, 2022 and 2021, respectively.

On January 24, 2023, 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 March 1, 2023, to all holders of record as of February 10, 2023.

This authorization has no expiration date.

As of March 31, 2023, the Company’s repurchase program had remaining authorized funds of $ 11.9 billion.

All share repurchase programs authorized prior to October 2022 have been completed.

The Company declared and paid dividends of $ 941 million and $ 802 million during the three months ended March 31, 2023 and 2022, respectively, and $ 1.9 billion and $ 1.6 billion during the six months ended March 31, 2023 and 2022, respectively.

On April 25, 2023, 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 June 1, 2023, to all holders of record as of May 12, 2023.

Note 9—Earnings Per Share

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

The following table presents earnings per share for the three months ended March 31, 2023:

Basic Earnings Per Share Diluted Earnings Per Share

7 unchanged sentences

Net income $ 4,257

The following table presents earnings per share for the six months ended March 31, 2023:

Basic Earnings Per Share Diluted Earnings Per Share

Outstanding (B) Earnings per

(in millions, except per share data)

Class A common stock $ 6,549 1,627 $ 4.03 $ 8,436 2,098 (3)

Class B common stock 1,584 245 $ 6.45 $ 1,582 245 $ 6.44

Class C common stock 157 10 $ 16.10 $ 156 10 $ 16.09

Participating securities 146 Not presented Not presented $ 146 Not presented Not presented

Net income $ 8,436

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

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

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

Basic Earnings Per Share Diluted Earnings Per Share

7 unchanged sentences

Net income $ 3,647

(1) The weighted-average number of shares of as-converted class B common stock used in the income allocation was 394 million and 398 million for the three months ended December 31, 2022 and 2021, respectively.

The weighted-average number of shares of as-converted class C common stock used in the income allocation was 39 million and 40 million for the three months ended December 31, 2022 and 2021, respectively.

The weighted-average number of shares of preferred stock included within participating securities was 13 million and 7 million of as-converted series A preferred stock for the three months ended December 31, 2022 and 2021, respectively, 7 million and 16 million of as-converted series B preferred stock for the three months ended December 31, 2022 and 2021, respectively, and 11 million and 22 million of as-converted series C preferred stock for the three months ended December 31, 2022 and 2021, respectively.

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

Basic Earnings Per Share Diluted Earnings Per Share

Outstanding (B) Earnings per

(in millions, except per share data)

Class A common stock $ 5,884 1,662 $ 3.54 $ 7,606 2,150 (3)

Class B common stock 1,409 245 $ 5.74 $ 1,407 245 $ 5.73

Class C common stock 143 10 $ 14.16 $ 143 10 $ 14.15

Participating securities 170 Not presented Not presented $ 169 Not presented Not presented

Net income $ 7,606

(1) The weighted-average number of shares of as-converted class B common stock used in the income allocation was 393 million for the three and six months ended March 31, 2023, and 397 million and 398 million for the three and six months ended March 31, 2022, respectively.

The weighted-average number of shares of as-converted class C common stock used in the income allocation was 39 million for the three and six months ended March 31, 2023 and 40 million for the three and six months ended March 31, 2022.

The weighted-average number of shares of preferred stock included within participating securities was 10 million and 11 million of as-converted series A preferred stock for the three and six months ended March 31, 2023, respectively, and 6 million of as-converted series A preferred stock for the three and six months ended March 31, 2022, 7 million of as-converted series B preferred stock for the three and six months ended March 31, 2023 and 16 million of as-converted series B preferred stock for the three and six months ended March 31, 2022, and 11 million of as-converted series C preferred stock for the three and six months ended March 31, 2023 and 22 million of as-converted series C preferred stock for the three and six months ended March 31, 2022.

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

1 unchanged sentence

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

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

The common stock equivalents are not material for the three and six months ended March 31, 2023 and 2022.

Note 10—Share-based Compensation

The following table presents the equity awards granted to employees and non-employee directors under the 2007 Equity Incentive Compensation Plan (EIP) during the three months ended December 31, 2022:

The following table presents the equity awards granted to employees and non-employee directors under the amended and restated 2007 Equity Incentive Compensation Plan (EIP) during the six months ended March 31, 2023:

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

4 unchanged sentences

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

For the three months ended December 31, 2022 and 2021, the Company recorded share-based compensation cost related to the EIP of $ 170 million and $ 121 million, respectively.

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

For the three months ended March 31, 2023 and 2022, the Company recorded share-based compensation cost related to the EIP of $ 214 million and $ 181 million, respectively, and for the six months ended March 31, 2023 and 2022, the Company recorded share-based compensation cost related to the EIP of $ 384 million and $ 302 million, respectively.

Note 11—Income Taxes

For the three months ended December 31, 2022 and 2021, the effective income tax rates were 16 % and 19 %, respectively.

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.

During the three months ended December 31, 2022, the Company’s gross and net unrecognized tax benefits decreased by $ 108 million and $ 149 million, respectively.

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

For the three and six months ended March 31, 2023, the effective income tax rates were 19 % and 18 %, respectively, and for the three and six months ended March 31, 2022, the effective income tax rates were 20 % and 19 %, respectively.

The difference in the effective tax rates is primarily due to a $ 142 million tax benefit related to prior years recognized during the six months ended March 31, 2023 due to the reassessment of an uncertain tax position as a result of new information obtained during an ongoing tax examination.

During the three months ended March 31, 2023, the Company’s gross and net unrecognized tax benefits increased by $ 86 million and $ 26 million, respectively.

During the six months ended March 31, 2023, the Company’s gross and net unrecognized tax benefits decreased by $ 22 million and $ 123 million, respectively.

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

Additionally, for the six month period, the decrease in unrecognized tax benefits is primarily due to the reassessment mentioned above, partially offset by an increase in gross timing differences.

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

11 unchanged sentences

The following table summarizes the activity related to accrued litigation:

Three Months Ended

Six Months Ended

(in millions)

10 unchanged sentences

covered litigation.

An accrual for the U.S.

An accrual for the

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

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

5 unchanged sentences

and Europe Retrospective Responsibility Plans.

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

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

covered litigation:

Three Months Ended

Six Months Ended

(in millions)

4 unchanged sentences

Balance at end of period $ 1,581 $ 764

During the three months ended December 31, 2022, the Company recorded an additional accrual of $ 341 million and deposited $ 350 million into the U.S.

During the six months ended March 31, 2023, the Company recorded an additional accrual of $ 341 million and deposited $ 350 million into the U.S.

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

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

covered litigation.

11 unchanged sentences

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

Three Months Ended

Six Months Ended

(in millions)

3 unchanged sentences

Balance at end of period $ 17 $ 5

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

Covered Litigation

Interchange Multidistrict Litigation (MDL) - Putative Class Actions

On March 15, 2023, the U.S.

Court of Appeals for the Second Circuit affirmed the final approval of the Amended Settlement Agreement by the district court.

Interchange Multidistrict Litigation (MDL) - Individual Merchant Actions

Visa has reached settlements with a number of merchants representing approximately 70 % of the Visa-branded payment card sales volume of merchants who opted out of the Amended Settlement Agreement with the Damages Class plaintiffs.

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

Consumer Interchange Litigation

On December 30, 2022, a putative class action was filed in California state court against Visa, Mastercard, and certain financial institutions on behalf of all Visa and Mastercard cardholders in California who made a purchase using a Visa-branded or Mastercard-branded payment card in California from January 1, 2004.

Plaintiffs primarily allege a conspiracy to fix interchange fees and seek injunctive relief, attorneys’ fees and damages as direct and indirect purchasers based on alleged violations of California law.

On January 11, 2023, plaintiffs filed an amended complaint asserting the same claims as asserted in the prior complaint.

On January 30, 2023, Visa removed the action to federal court.

On February 10, 2023, the Judicial Panel on Multidistrict Litigation issued an order transferring the case to MDL 1720.

On March 1, 2023, plaintiffs filed a motion to remand the case to California state court.

VE Territory Covered Litigation

6 unchanged sentences

Other Litigation

Visa’s motion challenging jurisdiction in the class action regarding interchange on cross-border transactions and the Honor All Cards rule in Israel was denied.

Other Litigation

European Commission Staged Digital Wallets Investigation

On February 16, 2023, the European Commission (EC) notified Visa that the matter has been closed.

EMV Chip Liability Shift

5 unchanged sentences

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

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

Foreign Currency Exchange Rate Litigation

On December 21, 2022, plaintiffs filed a third amended complaint asserting the same claims as asserted in the prior complaints.

On February 3, 2023, Visa filed a motion to dismiss the third amended complaint.

European Commission Client Incentive Agreements Investigation

On December 2, 2022, the European Commission (EC) informed Visa that it had opened a preliminary investigation into Visa’s incentive agreements with clients.

On December 2, 2022, the EC informed Visa that it had opened a preliminary investigation into Visa’s incentive agreements with clients.

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

Consumer Interchange Litigation

On January 11, 2023, plaintiffs filed an amended complaint asserting the same claims as asserted in the prior complaint.

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

What changed 10-Q

Item 1. Financial Statements