Item 2. Management’s Discussion and Analysis
ITEM 2. 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 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. The following discussion and analysis should be read in conjunction with our unaudited consolidated financial statements and related notes included in Item 1—Financial Statements of this report.
Forward-Looking Statements
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 war in Ukraine; the ongoing effects of the COVID-19 pandemic, including the resumption of international travel; prospects, developments, strategies and growth of our business; anticipated expansion of our products in certain countries; industry developments; anticipated timing and benefits of our acquisitions; expectations regarding litigation matters, investigations and proceedings; timing and amount of stock repurchases; sufficiency of sources of liquidity and funding; effectiveness of our risk management programs; and expectations regarding the impact of recent accounting pronouncements on our consolidated financial statements. Forward-looking statements generally are identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “projects,” “could,” “should,” “will,” “continue” and other similar expressions. 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, 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.
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Overview
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.
Financial overview. A summary of our as-reported U.S. GAAP and non-GAAP operating results is as follows:
Three Months Ended
March 31, Six Months Ended
March 31,
2023 2022 %
Change (1)
2023 2022 %
Change (1)
(in millions, except percentages and per share data)
Net revenues $ 7,985 $ 7,189 11 % $ 15,921 $ 14,248 12 %
Operating expenses $ 2,649 $ 2,387 11 % $ 5,495 $ 4,670 18 %
Net income $ 4,257 $ 3,647 17 % $ 8,436 $ 7,606 11 %
Diluted earnings per share $ 2.03 $ 1.70 20 % $ 4.02 $ 3.54 14 %
Non-GAAP operating expenses (2)
$ 2,581 $ 2,287 13 % $ 5,020 $ 4,402 14 %
Non-GAAP net income (2)
$ 4,384 $ 3,836 14 % $ 8,965 $ 7,737 16 %
Non-GAAP diluted earnings per share (2)
$ 2.09 $ 1.79 17 % $ 4.27 $ 3.60 19 %
(1) Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.
(2) For a full reconciliation of our GAAP to non-GAAP financial results, see tables in Non-GAAP financial results below.
Disruption in the Banking Sector. During the quarter ended March 31, 2023, certain financial institutions experienced liquidity issues, which resulted in the failure of two U.S. banks and volatility in the global financial markets. These events did not have an impact on our operating results. We continuously monitor and manage balance sheet and operational risks from clients in our portfolio, including their settlement obligations.
Russia & Ukraine. 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. 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 March 31, 2022, 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 recent liquidity issues at certain financial institutions and 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 half of fiscal 2023. For the three and six months ended March 31, 2023, net revenues increased 11% and 12% over the prior-year comparable periods, respectively, 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 and six months ended March 31, 2023, exchange rate movements lowered our net revenues growth by approximately two percentage points. See Results of Operations—Net Revenues below for further discussion.
For the three and six months ended March 31, 2023, GAAP operating expenses increased 11% and 18% over the prior-year comparable periods, respectively, primarily due to higher expenses related to personnel. For the six months ended March 31, 2023, GAAP operating expenses also included higher litigation provision. See Results of Operations—Operating Expenses below for further discussion. During the six months ended March 31, 2023, exchange rate movements lowered our operating expense growth by approximately one percentage point.
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For the three and six months ended March 31, 2023, non-GAAP operating expenses increased 13% and 14% over the prior-year comparable periods, respectively, primarily due to higher expenses related to personnel. For the six months ended March 31, 2023, non-GAAP operating expenses also included higher general and administrative expenses.
Interchange multidistrict litigation. During the six months ended March 31, 2023, 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. litigation escrow account. See Note 4—U.S. and Europe Retrospective Responsibility Plans and Note 12—Legal Matters to our unaudited consolidated financial statements .
Common stock repurchases. In October 2022, our board of directors authorized a $12.0 billion share repurchase program . During the six months ended March 31, 2023, we repurchased 26 million shares of our class A common stock in the open market for $5.3 billion. As of March 31, 2023, our repurchase programs had remaining authorized funds of $11.9 billion. See Note 8—Stockholders’ Equity to our unaudited consolidated financial statements.
Non-GAAP financial results. We use non-GAAP financial measures of our performance which exclude certain items which we believe are not representative of our continuing operations, as they may be non-recurring or have no cash impact, and may distort our longer-term operating trends. We consider non-GAAP measures useful to investors because they provide greater transparency into management’s view and assessment of our ongoing operating performance.
• Gains and losses on equity investments. Gains and losses on equity investments include periodic non-cash fair value adjustments and gains and losses upon sale of an investment. These long-term investments are strategic in nature and are primarily private company investments. Gains and losses and the related tax impacts associated with these investments are tied to the performance of the companies that we invest in and therefore do not correlate to the underlying performance of our business.
• Amortization of acquired intangible assets. Amortization of acquired intangible assets consists of amortization of intangible assets such as developed technology, customer relationships and brands acquired in connection with business combinations executed beginning in fiscal 2019. Amortization charges for our acquired intangible assets are non-cash and are significantly affected by the timing, frequency and size of our acquisitions, rather than our core operations. As such, we have excluded this amount and the related tax impact to facilitate an evaluation of our current operating performance and comparison to our past operating performance.
• Acquisition-related costs. Acquisition-related costs consist primarily of one-time transaction and integration costs associated with our business combinations. These costs include professional fees, technology integration fees, restructuring activities and other direct costs related to the purchase and integration of acquired entities. These costs also include retention equity and deferred equity compensation when they are agreed upon as part of the purchase price of the transaction but are required to be recognized as expense post-combination. We have excluded these amounts and the related tax impacts as the expenses are recognized for a limited duration and do not reflect the underlying performance of our business.
• Litigation provision. During the six months ended March 31, 2023 and 2022, we recorded additional accruals 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 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 three and six months ended March 31, 2022, we recorded a loss within general and administrative expense of $35 million from the deconsolidation of our Russian subsidiary. 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.
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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. GAAP. The following tables reconcile our as-reported financial measures, calculated in accordance with U.S. GAAP, to our respective non-GAAP financial measures:
Three Months Ended March 31, 2023
Operating Expenses Non-operating Income (Expense) Income Tax Provision Effective Income Tax Rate (1)
Net
Income Diluted Earnings Per Share (1)
(in millions, except percentages and per share data)
As reported $ 2,649 $ (58) $ 1,021 19.3 % $ 4,257 $ 2.03
(Gains) losses on equity investments, net — 90 19 71 0.03
Amortization of acquired intangible assets (46) — 10 36 0.02
Acquisition-related costs (22) — 2 20 0.01
Non-GAAP $ 2,581 $ 32 $ 1,052 19.4 % $ 4,384 $ 2.09
Six Months Ended March 31, 2023
Operating Expenses Non-operating Income (Expense) Income Tax Provision Effective Income Tax Rate (1)
Net
Income Diluted Earnings Per Share (1)
(in millions, except percentages and per share data)
As reported $ 5,495 $ (171) $ 1,819 17.7 % $ 8,436 $ 4.02
(Gains) losses on equity investments, net — 196 43 153 0.07
Amortization of acquired intangible assets (89) — 19 70 0.03
Acquisition-related costs (45) — 4 41 0.02
Litigation provision (341) — 76 265 0.13
Non-GAAP $ 5,020 $ 25 $ 1,961 17.9 % $ 8,965 $ 4.27
Three Months Ended March 31, 2022
Operating Expenses Non-operating Income (Expense) Income Tax Provision Effective Income Tax Rate (1)
Net
Income Diluted Earnings Per Share (1)
(in millions, except percentages and per share data)
As reported $ 2,387 $ (260) $ 895 19.7 % $ 3,647 $ 1.70
(Gains) losses on equity investments, net — 127 28 99 0.05
Amortization of acquired intangible assets (20) — 4 16 0.01
Acquisition-related costs (20) — 2 18 0.01
Russia-Ukraine charges (60) — 4 56 0.03
Non-GAAP $ 2,287 $ (133) $ 933 19.6 % $ 3,836 $ 1.79
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Six Months Ended March 31, 2022
Operating Expenses Non-operating Income (Expense) Income Tax Provision Effective Income Tax Rate (1)
Net
Income Diluted Earnings Per Share (1)
(in millions, except percentages and per share data)
As reported $ 4,670 $ (139) $ 1,833 19.4 % $ 7,606 $ 3.54
(Gains) losses on equity investments, net — (104) (14) (90) (0.04)
Amortization of acquired intangible assets (33) — 7 26 0.01
Acquisition-related costs (30) — 4 26 0.01
Litigation provision (145) — 32 113 0.05
Russia-Ukraine charges (60) — 4 56 0.03
Non-GAAP $ 4,402 $ (243) $ 1,866 19.4 % $ 7,737 $ 3.60
(1) Figures in the table may not recalculate exactly due to rounding. Effective income tax rate, diluted earnings per share and their respective totals are calculated based on unrounded numbers.
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Payments volume and processed transactions. Payments volume is the primary driver for our service revenues, and the number of processed transactions is the primary driver for our data processing revenues.
Payments volume represents the aggregate dollar amount of purchases made with cards and other form factors carrying the Visa, Visa Electron, V PAY and Interlink brands and excludes Europe co-badged volume. Nominal payments volume is denominated in U.S. dollars and is calculated each quarter by applying an established U.S. dollar/foreign currency exchange rate for each local currency in which our volumes are reported. Processed transactions represent transactions using cards and other form factors carrying the Visa, Visa Electron, V PAY, Interlink and PLUS brands processed on Visa’s networks.
The following table presents nominal payments and cash volume:
U.S. International Visa Inc.
Three Months Ended December 31, (1)
Three Months Ended December 31, (1)
Three Months Ended December 31, (1)
2022 2021 % Change (2)
2022 2021 % Change (2)
2022 2021 % Change (2)
(in billions, except percentages)
Nominal payments volume
Consumer credit
$ 569 $ 525 8 % $ 696 $ 708 (2 %) $ 1,265 $ 1,233 3 %
Consumer debit (3)
706 652 8 % 662 732 (10 %) 1,368 1,384 (1 %)
Commercial (4)
248 219 13 % 137 129 7 % 385 348 11 %
Total nominal payments volume (2)
$ 1,522 $ 1,395 9 % $ 1,495 $ 1,569 (5 %) $ 3,018 $ 2,964 2 %
Cash volume (5)
150 153 (2 %) 466 514 (9 %) 617 667 (8 %)
Total nominal volume (2),(6)
$ 1,673 $ 1,548 8 % $ 1,962 $ 2,083 (6 %) $ 3,634 $ 3,632 — %
U.S. International Visa Inc.
Six Months Ended December 31, (1)
Six Months Ended December 31, (1)
Six Months Ended December 31, (1)
2022 2021 % Change (2)
2022 2021 % Change (2)
2022 2021 % Change (2)
(in billions, except percentages)
Nominal payments volume
Consumer credit $ 1,120 $ 1,005 11 % $ 1,380 $ 1,360 2 % $ 2,500 $ 2,365 6 %
Consumer debit (3)
1,388 1,292 7 % 1,300 1,425 (9 %) 2,688 2,717 (1 %)
Commercial (4)
494 424 16 % 267 247 8 % 762 671 14 %
Total nominal payments volume (2)
$ 3,002 $ 2,721 10 % $ 2,947 $ 3,031 (3 %) $ 5,949 $ 5,752 3 %
Cash volume (5)
305 332 (8 %) 918 1,011 (9 %) 1,223 1,342 (9 %)
Total nominal volume (2),(6)
$ 3,307 $ 3,053 8 % $ 3,865 $ 4,041 (4 %) $ 7,172 $ 7,094 1 %
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The following table presents the change in nominal and constant payments and cash volume:
International Visa Inc. International Visa Inc.
Three Months
Ended December 31,
2022 vs. 2021 (1),(2)
Three Months
Ended December 31,
2022 vs. 2021 (1),(2)
Six Months
Ended December 31,
2022 vs. 2021 (1),(2)
Six Months
Ended December 31,
2022 vs. 2021 (1),(2)
Nominal Constant (7)
Nominal Constant (7)
Nominal Constant (7)
Nominal Constant (7)
Payments volume growth
Consumer credit growth (2 %) 10 % 3 % 9 % 2 % 12 % 6 % 12 %
Consumer debit growth (3)
(10 %) (2 %) (1 %) 3 % (9 %) (1 %) (1 %) 3 %
Commercial growth (4)
7 % 19 % 11 % 15 % 8 % 22 % 14 % 18 %
Total payments volume growth (5 %) 5 % 2 % 7 % (3 %) 7 % 3 % 9 %
Cash volume growth (5)
(9 %) (3 %) (8 %) (3 %) (9 %) (3 %) (9 %) (4 %)
Total volume growth (6 %) 3 % — % 5 % (4 %) 5 % 1 % 6 %
(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 six months ended March 31, 2023 and 2022, respectively, were based on nominal payments volume reported by our financial institution clients for the three and six months ended December 31, 2022 and 2021, respectively. On occasion, previously presented volume information may be updated. Prior-period updates are not material.
(2) Figures in the table may not recalculate exactly due to rounding. Percentage changes and totals are calculated based on unrounded numbers.
(3) Includes consumer prepaid volume and Interlink volume.
(4) Includes large, medium and small business credit and debit, as well as commercial prepaid volume.
(5) Cash volume generally consists of cash access transactions, balance access transactions, balance transfers and convenience checks.
(6) Total nominal volume is the sum of total nominal payments volume and cash volume. Total nominal volume is provided by our financial institution clients, subject to review by Visa.
(7) Growth on a constant-dollar basis excludes the impact of foreign currency fluctuations against the U.S. dollar.
The following table presents the number of processed transactions:
Three Months Ended
March 31, Six Months Ended
March 31,
2023 2022 %
Change (1)
2023 2022 %
Change (1)
(in millions, except percentages)
Visa processed transactions 50,069 44,807 12 % 102,581 92,366 11 %
(1) Figures in the table may not recalculate exactly due to rounding. Percentage change is calculated based on unrounded numbers. On occasion, previously presented information may be updated. Prior period updates are not material.
Results of Operations
Net Revenues
The following table presents our net revenues earned in the U.S. and internationally:
Three Months Ended
March 31, Six Months Ended
March 31,
2023 2022 %
Change (1)
2023 2022 %
Change (1)
(in millions, except percentages)
U.S. $ 3,540 $ 3,079 15 % $ 7,107 $ 6,257 14 %
International 4,445 4,110 8 % 8,814 7,991 10 %
Net revenues $ 7,985 $ 7,189 11 % $ 15,921 $ 14,248 12 %
(1) Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.
Net revenues increased during the three and six-month comparable periods primarily due to the growth in nominal cross-border volume, processed transactions and nominal payments volume, partially offset by higher client incentives.
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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. dollars. During the three and six months ended March 31, 2023, exchange rate movements lowered our net revenues growth by approximately two percentage points.
The following table presents the components of our net revenues:
Three Months Ended
March 31, Six Months Ended
March 31,
2023 2022 %
Change (1)
2023 2022 %
Change (1)
(in millions, except percentages)
Service revenues $ 3,771 $ 3,521 7 % $ 7,282 $ 6,714 8 %
Data processing revenues 3,819 3,480 10 % 7,646 7,094 8 %
International transaction revenues
2,749 2,208 24 % 5,546 4,382 27 %
Other revenues 551 474 16 % 1,138 923 23 %
Client incentives (2,905) (2,494) 16 % (5,691) (4,865) 17 %
Net revenues $ 7,985 $ 7,189 11 % $ 15,921 $ 14,248 12 %
(1) Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.
• Service revenues increased primarily due to 2% and 3% growth in nominal payments volume during the three and six-month comparable periods, respectively, despite the impact of our suspension of operations in Russia. Service revenues also increased due to business mix and select pricing modifications.
• Data processing revenues increased primarily due to overall growth in processed transactions of 12% and 11% during the three and six-month comparable periods, respectively, partially offset by our suspension of operations in Russia.
• International transaction revenues increased primarily due to growth in nominal cross-border volumes of 27% and 25% during the three and six-month comparable periods, respectively, excluding transactions within Europe. International transaction revenues also increased due to volatility of a broad range of currencies and select pricing modifications, partially offset by business mix.
• Other revenues increased primarily due to value added services revenues tied to marketing and consulting services. Other revenues also increased due to acquisition-related revenues.
• Client incentives increased primarily due to growth in payments volume during the three and six-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 the execution of new contracts.
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Operating Expenses
The following table presents the components of our total operating expenses:
Three Months Ended
March 31, Six Months Ended
March 31,
2023 2022 %
Change (1)
2023 2022 %
Change (1)
(in millions, except percentages)
Personnel $ 1,515 $ 1,226 24 % $ 2,852 $ 2,351 21 %
Marketing 309 314 (2 %) 641 594 8 %
Network and processing 179 190 (6 %) 357 380 (6 %)
Professional fees 130 125 5 % 239 225 7 %
Depreciation and amortization
234 207 13 % 461 405 14 %
General and administrative
282 325 (13 %) 604 567 6 %
Litigation provision — — NM 341 148 131 %
Total operating expenses $ 2,649 $ 2,387 11 % $ 5,495 $ 4,670 18 %
NM - Not meaningful
(1) Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.
• 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 during the six months ended March 31, 2023 primarily due to increased spending in various campaigns, including the FIFA World Cup 2022 TM and client marketing. The increase was partially offset by the absence of spending for the Beijing 2022 Olympic Winter Games in the current period.
• 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 decreased during the three months ended March 31, 2023 primarily due to the absence of expenses as a result of the suspension of our operations in Russia. During the six months ended March 31, 2023, expenses increased primarily due to an increase in travel expenses and higher usage of travel related card benefits, partially offset by the absence of expenses as a result of the suspension of our operations in Russia.
• Litigation provision increased during the six months ended March 31, 2023 primarily due to an increase in accrual related to the U.S. covered litigation. See Note 12—Legal Matters to our unaudited consolidated financial statements.
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Non-operating Income (Expense)
The following table presents the components of our non-operating income (expense):
Three Months Ended
March 31, Six Months Ended
March 31,
2023 2022 %
Change (1)
2023 2022 %
Change (1)
(in millions, except percentages)
Interest expense $ (142) $ (134) 6 % $ (279) $ (268) 4 %
Investment income (expense) and other 84 (126) (167 %) 108 129 (16 %)
Total non-operating income (expense) $ (58) $ (260) (78 %) $ (171) $ (139) 23 %
(1) Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.
• Interest expense increased during the three and six months ended March 31, 2023 primarily driven by lower gains from derivative instruments, partially offset by lower interest related to indirect taxes.
• Investment income (expense) and other increased during the three months ended March 31, 2023 primarily due to higher interest income on our cash and investments and lower losses on our equity investments. Investment income and other decreased during the six months ended March 31, 2023 primarily due to losses on our investments, offset by higher interest income on our cash and investments.
Effective Income Tax Rate
The following table presents our effective income tax rates:
Three Months Ended
March 31, Six Months Ended
March 31,
2023 2022 2023 2022
Effective income tax rate 19 % 20 % 18 % 19 %
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.
Liquidity and Capital Resources
Cash Flow Data
The following table summarizes our cash flow activity for the periods presented:
Six Months Ended
March 31,
2023 2022
(in millions)
Total cash provided by (used in):
Operating activities $ 8,031 $ 7,721
Investing activities (835) (2,332)
Financing activities (9,273) (8,367)
Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents 828 (305)
Increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents
$ (1,249) $ (3,283)
Operating activities. Cash provided by operating activities for the six months ended March 31, 2023 was higher than the prior-year comparable period primarily due to growth in our underlying business, partially offset by higher incentive payments.
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Investing activities. Cash used in investing activities for the six months ended March 31, 2023 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 maturities and sales, of investment securities.
Financing activities. Cash used in financing activities for the six months ended March 31, 2023 was higher than the prior-year comparable period primarily due to the principal debt payment upon maturity of our December 2022 senior notes, the absence of proceeds from the issuance of commercial paper 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 .
Sources of Liquidity
Our primary sources of liquidity are cash on hand, cash flow from our operations, our investment portfolio and access to various equity and borrowing arrangements. Funds from operations are maintained in cash and cash equivalents and short-term or long-term investment securities based upon our funding requirements, access to liquidity from these holdings and the returns that these holdings provide. Based on our current cash flow budgets and forecasts of our short-term and long-term liquidity needs, we believe that our current and projected sources of liquidity will be sufficient to meet our projected liquidity needs for more than the next 12 months. 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.
Uses of Liquidity
There has been no significant change to our primary uses of liquidity since September 30, 2022, except as discussed below.
Common stock repurchases. During the six months ended March 31, 2023, we repurchased shares of our class A common stock in the open market for $5.3 billion. As of March 31, 2023, our repurchase programs had remaining authorized funds of $11.9 billion. See Note 8—Stockholders’ Equity to our unaudited consolidated financial statements.
Dividends . During the six months ended March 31, 2023, we declared and paid $1.9 billion in dividends to holders of our common and preferred stock. On April 25, 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. We expect to continue paying quarterly dividends in cash, subject to approval by the board of directors. All preferred and class B and C common stock will share ratably on an as-converted basis in such future dividends.
Senior notes . During the six months ended March 31, 2023, 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.
Litigation. During the six months ended March 31, 2023, 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 March 31, 2023 was $1.6 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.
Accounting Pronouncements Not Yet Adopted
The Financial Accounting Standards Board has issued certain accounting updates, which we have either determined to be not applicable or not expected to have a material impact on our consolidated financial statements.
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk
There have been no significant changes to our market risks since September 30, 2022.
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