What changed in this filing

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Item 1. Financial Statements

2023-07-26 compared with 2023-04-27 · 130 added, 96 removed, 727 unchanged (24% of the section changed)

52 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2023 2022 2023 2022

37 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2023 2022 2023 2022

7 unchanged sentences

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

3 ( 2 ) 5 ( 1 )

Income tax effect — — ( 1 ) —

Reclassification adjustments 3 — 7 2

Income tax effect ( 1 ) — ( 1 ) —

Derivative instruments:

8 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Three Months Ended March 31, 2023

Three Months Ended June 30, 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

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

Net income 4,156 4,156

1 unchanged sentence

VE territory covered losses incurred ( 6 ) ( 6 )

Recovery through conversion rate adjustment ( 16 ) 16 —

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

( 83 ) 1 83 —

Share-based compensation, net of forfeitures 223 223

Share-based compensation expense 191 191

Stock issued under equity plans 1 71 71

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

( 1 ) ( 7 ) ( 7 )

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

1 unchanged sentence

Repurchase of class A common stock ( 13 ) ( 143 ) ( 2,921 ) ( 3,064 )

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

Balance as of June 30, 2023 5 $ 1,786 1,862 $ 20,290 $ ( 25 ) $ 17,908 $ ( 978 ) $ 38,981

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

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—(Continued)

Six Months Ended March 31, 2023

Nine Months Ended June 30, 2023

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

12 unchanged sentences

( 508 ) 8 508 —

Share-based compensation, net of forfeitures 400 400

Share-based compensation expense 591 591

Stock issued under equity plans 4 189 189

4 unchanged sentences

Repurchase of class A common stock ( 39 ) ( 418 ) ( 7,977 ) ( 8,395 )

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

Balance as of June 30, 2023 5 $ 1,786 (1)

1,862 $ 20,290 $ ( 25 ) $ 17,908 $ ( 978 ) $ 38,981

(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.

(1) As of June 30, 2023 and September 30, 2022, the book value of series A preferred stock was $ 544 million and $ 1.0 billion, respectively.

Refer to Note 5—U.S.

3 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—(Continued)

Three Months Ended March 31, 2022

Three Months Ended June 30, 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 December 31, 2021 5 $ 2,995 1,916 $ 18,776 $ ( 111 ) $ 14,606 $ ( 72 ) $ 36,194

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

Net income 3,411 3,411

1 unchanged sentence

VE territory covered losses incurred ( 15 ) ( 15 )

Recovery through conversion rate adjustment ( 112 ) 112 —

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

Share-based compensation, net of forfeitures 190 190

( 24 ) 1 24 —

Share-based compensation expense 152 152

Stock issued under equity plans — (1)

3 unchanged sentences

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

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

Balance as of June 30, 2022 5 $ 2,851 1,892 $ 18,962 $ ( 23 ) $ 14,960 $ ( 1,267 ) $ 35,483

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

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—(Continued)

Six Months Ended March 31, 2022

Nine Months Ended June 30, 2022

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

12 unchanged sentences

( 88 ) 2 88 —

Share-based compensation, net of forfeitures

Share-based compensation expense

Stock issued under equity plans 4 153 153

4 unchanged sentences

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

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

Balance as of June 30, 2022 5 $ 2,851 1,892 $ 18,962 $ ( 23 ) $ 14,960 $ ( 1,267 ) $ 35,483

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

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

Nine Months Ended

(in millions)

3 unchanged sentences

Client incentives 8,858 7,435

Share-based compensation 400 318

Share-based compensation expense 591 470

Depreciation and amortization of property, equipment, technology and intangible assets 696 635

27 unchanged sentences

Dividends paid ( 2,823 ) ( 2,409 )

Proceeds from issuance of commercial paper — 300

Proceeds from issuance of senior notes — 3,218

Cash proceeds from issuance of class A common stock under equity plans 189 153

4 unchanged sentences

Increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents

( 1,249 ) ( 3,283 )

Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period 20,377 19,799

17 unchanged sentences

The Company’s investments in VIEs have not been material to its unaudited consolidated financial statements as of and for the periods presented.

All significant intercompany accounts and transactions are eliminated in consolidation.

Intercompany balances and transactions have been eliminated in consolidation.

The accompanying unaudited consolidated financial statements are presented in accordance with U.S.

Securities and Exchange Commission (SEC) requirements for Quarterly Reports on Form 10-Q and, consequently, do not include all of the annual disclosures required by U.S.

Reference should be made to the Visa Annual Report on Form 10-K for the year ended September 30, 2022 for additional disclosures, including a summary of the Company’s significant accounting policies.

Reference should be made to Visa’s Annual Report on Form 10-K for the year ended September 30, 2022 for additional disclosures, including a summary of the Company’s significant accounting policies.

In the opinion of management, the accompanying unaudited consolidated financial statements include all normal recurring adjustments necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the interim periods presented.

11 unchanged sentences

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.

During the prior quarter, 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)

Note 2—Acquisitions

Pending Acquisition

In June 2023, Visa entered into a definitive agreement to acquire Pismo Holdings, a cloud-native issuer processing and core banking platform with operations in Latin America, Asia Pacific and Europe, for $ 1.0 billion in cash.

This acquisition is subject to customary closing conditions, including applicable regulatory reviews and approvals.

Note 3—Revenues

2 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2023 2022 2023 2022

7 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2023 2022 2023 2022

14 unchanged sentences

$ 21,039 $ 20,377

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

and Europe Retrospective Responsibility Plans

7 unchanged sentences

See Note 13—Legal Matters .

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

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

litigation escrow account:

Six Months Ended

Nine Months Ended

(in millions)

Balance at beginning of period $ 1,449 $ 894

Deposits into the litigation escrow account 350 250

Deposits into the U.S.

litigation escrow account 850 850

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

9 unchanged sentences

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

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

The following table presents the activities related to VE territory covered losses in preferred stock and “right to recover for covered losses” within stockholders’ equity:

7 unchanged sentences

( 19 ) ( 11 ) 31

Balance as of March 31, 2023

Balance as of June 30, 2023

$ 441 $ 801 $ ( 25 )

5 unchanged sentences

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

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

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

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

1 unchanged sentence

(2) Adjustment to right to recover for covered losses for the conversion rate adjustment differs from the actual recovered amount due to differences in foreign exchange rates between the time the losses were incurred and the subsequent recovery through the conversion rate adjustment.

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

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

March 31, 2023 September 30, 2022

June 30, 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 March 31, 2023, the as-converted value of preferred stock is calculated as the product of:

(2) As of June 30, 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 March 31,

2022 June 30,

2023 September 30,

32 unchanged sentences

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

March 31, 2023

June 30, 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:

March 31, 2023

June 30, 2023

Less Than 12 Months

20 unchanged sentences

The Company’s non-marketable equity securities are investments in privately held companies without readily determinable market values.

These investments are measured at fair value on a non-recurring basis and are classified as Level 3 due to the absence of quoted market prices, the inherent lack of liquidity and the fact that inputs used to measure fair value are unobservable and require management’s judgment.

These investments are measured at fair value on a non-recurring basis and are classified as Level 3 due to the absence of quoted market prices, the inherent lack of liquidity and the fact that significant inputs used to measure fair value are unobservable and require management’s judgment.

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 March 31, 2023 including cumulative unrealized gains and losses:

The following table summarizes the total carrying value of the Company’s non-marketable equity securities held as of June 30, 2023 including cumulative unrealized gains and losses:

(in millions)

3 unchanged sentences

Carrying amount, end of period $ 1,232

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:

Unrealized gains and losses included in the carrying value of the Company’s non-marketable equity securities still held as of June 30, 2023 and 2022 were as follows:

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2023 2022 2023 2022

2 unchanged sentences

Downward adjustments (including impairment) $ — $ ( 284 ) $ ( 86 ) $ ( 337 )

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.

For the three months ended June 30, 2023 and 2022, the Company recognized net unrealized gains of $ 96 million and net unrealized losses of $ 278 million, respectively, on marketable and non-marketable equity securities still held as of quarter end.

For the nine months ended June 30, 2023 and 2022, the Company recognized net unrealized losses of $ 85 million and $ 262 million, respectively, on marketable and non-marketable equity securities still held as of quarter end.

Other Fair Value Disclosures

2 unchanged sentences

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

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

As of June 30, 2023, the carrying value and estimated fair value of debt was $ 20.6 billion and $ 18.6 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 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.

As of June 30, 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.

2 unchanged sentences

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 .

No recent events or changes in circumstances indicated that impairment existed as of June 30, 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 six months ended March 31, 2023, the Company repaid $ 2.25 billion of principal upon maturity of its senior notes due December 2022.

During the nine months ended June 30, 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 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.

During the nine months ended June 30, 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 June 30, 2023, all of the € 3.0 billion Euro Notes were designated as a net investment hedge.

Credit Facility

In May 2023, the Company entered into an amended and restated credit agreement for a 5 year, unsecured $ 7.0 billion revolving credit facility, which will expire in May 2028.

Interest on borrowings will be charged at the applicable reference rate or an alternative base rate as defined in the credit agreement based on the currency and

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

type of the borrowing, plus an applicable margin based on the applicable credit rating of the Company’s senior unsecured long-term debt.

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

As of June 30, 2023, the Company was in compliance with all related covenants.

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

As of June 30, 2023 and September 30, 2022, the Company had no amounts outstanding under the credit facility.

Note 8—Settlement Guarantee Management

4 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 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.

During the nine months ended June 30, 2023, the Company’s maximum daily settlement exposure was $ 125.6 billion and the average daily settlement exposure was $ 76.3 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:

March 31, 2023 September 30, 2022

June 30, 2023 September 30, 2022

Outstanding Conversion Rate Into

8 unchanged sentences

Class A common stock 1,607 — 1,607 1,635 — 1,635

1,619 — 1,619 1,635 — 1,635

Class B common stock 245 1.5902 (3)

5 unchanged sentences

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

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

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

1 unchanged sentence

Reduction in as-converted shares.

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

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

Six Months Ended

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

litigation escrow account under the U.S.

retrospective responsibility plan:

Nine Months Ended

(in millions, except per share data)

2 unchanged sentences

$ 219.70 $ 205.06

Deposits under the U.S.

retrospective responsibility plan $ 350 $ 250

(1) Effective price per share is calculated using the volume-weighted average price of the Company’s class A common stock over a pricing period in accordance with the Company’s current certificate of incorporation.

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

Six Months Ended

March 31, 2023 Six Months Ended

March 31, 2022

Deposits into the U.S.

litigation escrow account $ 850 $ 850

(1) Effective price per share for the period represents the weighted-average price calculated using the effective prices per share of the respective adjustments made during the period.

Effective price per share for each adjustment is calculated using the volume-weighted average price of the Company’s class A common stock over a pricing period in accordance with the Company’s current certificate of incorporation.

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

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

Nine Months Ended

June 30, 2023 Nine Months Ended

June 30, 2022

Series B Series C Series B Series C

6 unchanged sentences

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

(2) Effective price per share for the quarter is calculated using the volume-weighted average price of the Company’s class A common stock over a pricing period in accordance with the Company’s current certificates of designations for its series B and C preferred stock.

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

(2) Effective price per share for the period represents the weighted-average price calculated using the effective prices per share of the respective adjustments made during the period.

Common stock repurchases.

1 unchanged sentence

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2023 2022 2023 2022

5 unchanged sentences

$ 3,064 $ 2,433 $ 8,395 $ 9,486

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

(1) Shares repurchased in the open market reflect repurchases that settled during the three and nine months ended June 30, 2023 and 2022, respectively.

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

3 unchanged sentences

This authorization has no expiration date.

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

As of June 30, 2023, the Company’s repurchase program had remaining authorized funds of $ 8.8 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.

During the three months ended June 30, 2023 and 2022, the Company declared and paid dividends of $ 937 million and $ 798 million, respectively.

During the nine months ended June 30, 2023 and 2022, the Company declared and paid dividends of $ 2.8 billion and $ 2.4 billion, respectively.

On July 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), payable on September 1, 2023, to all holders of record as of August 11, 2023.

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

Note 10—Earnings Per Share

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

The following table presents earnings per share for the three months ended June 30, 2023:

Basic Earnings Per Share Diluted Earnings Per Share

7 unchanged sentences

Net income $ 4,156

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

The following table presents earnings per share for the nine months ended June 30, 2023:

Basic Earnings Per Share Diluted Earnings Per Share

7 unchanged sentences

Net income $ 12,592

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

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

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

Basic Earnings Per Share Diluted Earnings Per Share

7 unchanged sentences

Net income $ 3,411

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

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

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

Basic Earnings Per Share Diluted Earnings Per Share

7 unchanged sentences

Net income $ 11,017

(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.

(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 nine months ended June 30, 2023, and 397 million and 398 million for the three and nine months ended June 30, 2022, respectively.

The weighted-average number of shares of as-converted class C common stock used in the income allocation was 38 million and 39 million for the three and nine months ended June 30, 2023, respectively, and 40 million for the three and nine months ended June 30, 2022.

The weighted-average number of shares of preferred stock included within participating securities was 8 million and 10 million of as-converted series A preferred stock for the three and nine months ended June 30, 2023, respectively, and 6 million of as-converted series A preferred stock for the three and nine months ended June 30, 2022, 7 million of as-converted series B preferred stock for the three and nine months ended June 30, 2023 and 15 million and 16 million of as-converted series B preferred stock for the three and nine months ended June 30, 2022, respectively and 11 million of as-converted series C preferred stock for the three and nine months ended June 30, 2023 and 22 million of as-converted series C preferred stock for the three and nine months ended June 30, 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 and six months ended March 31, 2023 and 2022.

The common stock equivalents are not material for the three and nine months ended June 30, 2023 and 2022.

Note 11—Share-based Compensation

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 June 30, 2023 and 2022, the Company recorded share-based compensation expense related to the EIP of $ 184 million and $ 145 million, respectively.

For the nine months ended June 30, 2023 and 2022, the Company recorded share-based compensation expense related to the EIP of $ 568 million and $ 447 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 12—Income Taxes

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.

For the three and nine months ended June 30, 2023, the effective income tax rates were 19 % and 18 %, respectively, and for the three and nine months ended June 30, 2022, the effective income tax rates were 11 % and 17 %, respectively.

The difference in the effective tax rates is primarily due to the following:

• During the nine months ended June 30, 2023, a $ 142 million tax benefit related to prior years 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 June 30, 2022, a $ 176 million tax benefit related to prior years due to a decrease in the state apportionment ratio as a result of a tax position taken related to a ruling.

During the three and nine months ended June 30, 2023, the Company’s gross unrecognized tax benefits increased by $ 615 million and $ 593 million, respectively.

The Company’s net unrecognized tax benefits that, if recognized, would favorably impact the effective tax rate, increased by $ 315 million and $ 192 million, respectively.

The change in unrecognized tax benefits is related to various tax positions across several jurisdictions, including refund claims filed during the quarter.

Additionally, the nine month period reflects the change in unrecognized tax benefits related to the reassessment mentioned above.

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:

Six Months Ended

Nine Months Ended

(in millions)

21 unchanged sentences

covered litigation:

Six Months Ended

Nine Months Ended

(in millions)

4 unchanged sentences

Balance at end of period $ 1,539 $ 1,480

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.

During the three and nine months ended June 30, 2023, the Company recorded additional accruals of $ 456 million and $ 797 million, respectively, and deposited $ 500 million and $ 850 million, respectively, into the U.S.

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

13 unchanged sentences

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

Six Months Ended

Nine Months Ended

(in millions)

10 unchanged sentences

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.

Additional summary judgment motions were filed by plaintiffs and defendants in an individual merchant action.

On July 14, 2023, Block, Inc.

filed a lawsuit against Visa Inc., Visa U.S.A., Visa International, Mastercard Incorporated, and Mastercard International Incorporated in the U.S.

District Court for the Eastern District of New York, generally pursuing claims on allegations similar to those raised in MDL 1720.

Square, a business unit of Block, Inc., previously submitted a request to opt out of the Amended Settlement Agreement.

The parties have requested reassignment of the case to the judge presiding over MDL 1720 for inclusion in MDL 1720.

Consumer Interchange Litigation

4 unchanged sentences

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.

On June 15, 2023, plaintiffs’ motion to remand the case to California state court was denied, and plaintiffs have appealed.

VE Territory Covered Litigation

5 unchanged sentences

Standstill agreements have been entered into with respect to some of those threatened Merchant claims, several of which have been settled.

On June 8, 2023, the UK Competition Appeal Tribunal denied class certification in the two class action claims.

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.

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

Other Litigation

ATM Access Fee Litigation

On July 25, 2023, the U.S.

Court of Appeals for the District of Columbia Circuit affirmed the district court’s class certification decisions.

European Commission Staged Digital Wallets Investigation

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

German ATM Litigation

On July 6, 2023, one of the challenges to the jurisdiction of the German courts was denied.

EMV Chip Liability Shift

1 unchanged sentence

Department of Justice Civil Investigative Demand (2021)

On January 4, 2023, the Antitrust Division of the U.S.

Department of Justice (Division) issued a further Civil Investigative Demand seeking additional documents and information focusing on U.S.

On January 4, 2023 and May 2, 2023, the Antitrust Division of the U.S.

Department of Justice (Division) issued further Civil Investigative Demands seeking additional documents and information focusing on U.S.

debit and competition with other payment methods and networks.

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

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

Foreign Currency Exchange Rate Litigation

5 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements