What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-01-26 compared with 2023-07-26 · 75 added, 169 removed, 215 unchanged (53% of the section changed)

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

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

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

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;

the implementation of the exchange offer program;

prospects, developments, strategies and growth of our business;

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effectiveness of our risk management programs;

and expectations regarding the impact of recent accounting pronouncements on our consolidated financial statements.

and expectations regarding the impact of recent accounting pronouncements on our unaudited 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.

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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.

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

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

Financial overview.

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Three Months Ended

June 30, Nine Months Ended

(in millions, except percentages and per share data)

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(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 nine months ended June 30, 2023, certain U.S.

banks failed, which caused 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 nine months ended June 30, 2022, total net revenues from Russia, including revenues driven by domestic as well as cross-border activities, was approximately 3% 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 nine months of fiscal 2023.

For the three and nine months ended June 30, 2023, net revenues increased 12% over each prior-year comparable period, primarily due to the growth in nominal cross-border volume, processed transactions and nominal payments volume, partially offset by higher client incentives.

During the three and nine months ended June 30, 2023, exchange rate movements lowered our net revenues growth by approximately one percentage point and two percentage points, respectively.

Highlights for the first quarter of fiscal 2024.

For the three months ended December 31, 2023, net revenues increased 9% over the prior-year comparable period, primarily due to the growth in nominal cross-border volume, processed transactions and nominal payments volume, partially offset by higher client incentives.

During the three months ended December 31, 2023, exchange rate movements did not have a material impact on net revenues growth.

See Results of Operations—Net Revenues below for further discussion.

For the three months ended June 30, 2023, GAAP operating expenses decreased 1% over the prior-year comparable period, primarily due to lower litigation provision, largely offset by higher expense related to personnel.

For the nine months ended June 30, 2023, GAAP operating expenses increased 10% over the prior-year comparable period, primarily due to higher expense related to personnel.

For the three months ended December 31, 2023, GAAP operating expenses decreased 6% over the prior-year comparable period, primarily driven by lower litigation provision, partially offset by higher personnel expenses.

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

During the nine months ended June 30, 2023, exchange rate movements lowered our operating expense growth by approximately one percentage point.

For the three and nine months ended June 30, 2023, non-GAAP operating expenses increased 10% and 12% over the prior-year comparable periods, respectively, primarily due to higher expense related to personnel.

For the nine months ended June 30, 2023, non-GAAP operating expenses also included higher general and administrative expense.

Pending acquisition.

In June 2023, we entered into a definitive agreement to acquire Pismo Holdings (Pismo), 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.

Interchange multidistrict litigation.

During the nine months ended June 30, 2023, we recorded additional accruals of $797 million to address claims associated with the interchange multidistrict litigation.

We also made deposits of $850 million into the U.S.

litigation escrow account.

See Note 5—U.S.

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

During the three months ended December 31, 2023, exchange rate movements positively impacted our operating expenses by approximately one percentage point.

For the three months ended December 31, 2023, non-GAAP operating expenses increased 7% over the prior-year comparable period, primarily driven by higher personnel expenses.

On January 16, 2024, we acquired Pismo Holdings (Pismo), a global cloud-native issuer processing and core banking platform, for $1.0 billion in cash.

Common stock repurchases.

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

During the nine months ended June 30, 2023, we repurchased 39 million shares of our class A common stock in the open market for $8.4 billion.

As of June 30, 2023, our repurchase program had remaining authorized funds of $8.8 billion.

During the three months ended December 31, 2023, we repurchased 15 million shares of our class A common stock in the open market for $3.6 billion.

As of December 31, 2023, our share repurchase programs had remaining authorized funds of $26.4 billion.

See Note 9—Stockholders’ Equity to our unaudited consolidated financial statements.

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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.

Gains and losses 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.

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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.

As such, we have excluded this amount to facilitate an evaluation of our current operating performance and comparison to our past operating performance.

• Acquisition-related costs.

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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.

We have excluded these amounts as the expenses are recognized for a limited duration and do not reflect the underlying performance of our business.

• Litigation provision.

During the three months ended June 30, 2023 and 2022, we recorded additional accruals to address claims associated with the interchange multidistrict litigation of $456 million and $716 million, respectively, and related tax benefit of $101 million and $159 million, respectively, determined by applying applicable tax rates.

During the nine months ended June 30, 2023 and 2022, we recorded additional accruals to address claims associated with the interchange multidistrict litigation of $797 million and $861 million, respectively, and related tax benefit of $177 million and $191 million, respectively, determined by applying applicable tax rates.

During the three months ended December 31, 2022, we recorded additional accruals to address claims associated with the interchange multidistrict litigation.

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.

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

During the three months ended December 31, 2022, basic and diluted earnings per class A common stock were unchanged, as a result of the downward adjustments of the class B common stock conversion rate during the period.

See Note 5—U.S.

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

• Russia-Ukraine charges .

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

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.

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

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GAAP, to our respective non-GAAP financial measures:

Three Months Ended June 30, 2023

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

Income Diluted Earnings Per Share (1)

(in millions, except percentages and per share data)

As reported $ 3,099 $ 122 $ 990 19.2 % $ 4,156 $ 2.00

(Gains) losses on equity investments, net — (85) (18) (67) (0.03)

Amortization of acquired intangible assets (41) — 9 32 0.02

Acquisition-related costs (24) — 1 23 0.01

Litigation provision (456) — 101 355 0.17

Non-GAAP $ 2,578 $ 37 $ 1,083 19.4 % $ 4,499 $ 2.16

Nine Months Ended June 30, 2023

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

Income Diluted Earnings Per Share (1)

(in millions, except percentages and per share data)

As reported $ 8,594 $ (49) $ 2,809 18.2 % $ 12,592 $ 6.02

(Gains) losses on equity investments, net — 111 25 86 0.04

Amortization of acquired intangible assets (130) — 28 102 0.05

Acquisition-related costs (69) — 5 64 0.03

Litigation provision (797) — 177 620 0.30

Non-GAAP $ 7,598 $ 62 $ 3,044 18.4 % $ 13,464 $ 6.44

Three Months Ended June 30, 2022

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

Three Months Ended

December 31, 2023

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

Effective Income Tax Rate (2)

Income Diluted Earnings Per Share (2)

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Acquisition-related costs (21) — 1 20 0.01

Litigation provision (716) — 159 557 0.26

Non-GAAP $ 2,619 $ 84 $ 1,161 19.0 % $ 4,938 $ 2.41

Nine Months Ended June 30, 2022

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

Three Months Ended

December 31, 2022

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

Effective Income Tax Rate (2)

Income Diluted Earnings Per Share (2)

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Litigation provision (341) — 76 265 0.13

Russia-Ukraine charges (60) — 4 56 0.03

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

(1) Determined by applying applicable tax rates.

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

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International Visa Inc.

Three Months Ended March 31, (1)

Three Months Ended September 30, (1)

2023 2022 % Change (2)

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$ 1,724 $ 1,635 5 % $ 2,103 $ 1,904 11 % $ 3,827 $ 3,538 8 %

International Visa Inc.

Nine Months Ended March 31, (1)

2023 2022 % Change (2)

(in billions, except percentages)

Nominal payments volume

Consumer credit $ 1,650 $ 1,492 11 % $ 2,078 $ 2,018 3 % $ 3,728 $ 3,510 6 %

Consumer debit (3)

2,088 1,929 8 % 1,954 2,087 (6 %) 4,042 4,016 1 %

Commercial (4)

735 638 15 % 403 368 9 % 1,138 1,006 13 %

Total nominal payments volume (2)

$ 4,473 $ 4,058 10 % $ 4,435 $ 4,473 (1 %) $ 8,908 $ 8,532 4 %

Cash volume (5)

454 475 (4 %) 1,365 1,472 (7 %) 1,820 1,947 (7 %)

Total nominal volume (2),(6)

$ 4,927 $ 4,534 9 % $ 5,800 $ 5,945 (2 %) $ 10,727 $ 10,479 2 %

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

International Visa Inc.

Ended March 31,

Nominal Constant (7)

Ended September 30,

Nominal Constant (7)

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Total volume growth 11 % 10 % 8 % 8 %

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

Therefore, service revenues reported for the three and nine months ended June 30, 2023 and 2022, respectively, were based on nominal payments volume reported by our financial institution clients for the three and nine months ended March 31, 2023 and 2022, respectively.

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

Therefore, service revenues reported for the three months ended December 31, 2023 and 2022, respectively, were based on nominal payments volume reported by our financial institution clients for the three months ended September 30, 2023 and 2022, respectively.

On occasion, previously presented volume information may be updated.

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Three Months Ended

June 30, Nine Months Ended

(in millions, except percentages)

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Three Months Ended

June 30, Nine Months Ended

(in millions, except percentages)

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Percentage changes are calculated based on unrounded numbers.

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

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

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

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

During the three and nine months ended June 30, 2023, exchange rate movements lowered our net revenues growth by approximately one percentage point and two percentage points, respectively.

During the three months ended December 31, 2023, exchange rate movements did not have a material impact on net revenues growth.

The following table presents the components of our net revenues:

Three Months Ended

June 30, Nine Months Ended

(in millions, except percentages)

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Percentage changes are calculated based on unrounded numbers.

• Service revenues increased primarily due to 6% and 4% growth in nominal payments volume over the three and nine-month prior-year comparable periods, respectively, and due to business mix.

Service revenues increased over the nine month prior-year comparable period despite the impact of our suspension of operations in Russia.

• Data processing revenues increased primarily due to overall growth in processed transactions of 10% and 11% over the three and nine-month prior-year comparable periods, respectively, growth in value added

services and select pricing modifications.

Data processing revenues increased over the nine month prior-year comparable period despite the impact of our suspension of operations in Russia.

• International transaction revenues increased over the three month prior-year comparable period primarily due to growth in nominal cross-border volumes of 22%, excluding transactions within Europe, and select pricing modifications, partially offset by business mix and lower volatility of a broad range of currencies.

International transaction revenues increased over the nine month prior-year comparable period primarily due to growth in nominal cross-border volumes of 23%, excluding transactions within Europe, and select pricing modifications, partially offset by business mix.

• Other revenues increased over the three month prior-year comparable period primarily due to select pricing modifications and growth in value added services revenues tied to consulting services.

Other revenues increased over the nine month prior-year comparable period due to growth in value added services tied to marketing and consulting services, select pricing modifications and acquisition-related revenues.

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

• Service revenues increased primarily due to 9% growth in nominal payments volume and select pricing modifications.

• Data processing revenues increased primarily due to 9% growth in processed transactions, select pricing modifications and business mix.

• International transaction revenues increased primarily due to growth in nominal cross-border volumes of 18%, excluding transactions within Europe, partially offset by lower volatility of a broad range of currencies.

• Other revenues increased primarily due to select pricing modifications and growth in consulting services.

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

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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Three Months Ended

June 30, Nine Months Ended

(in millions, except percentages)

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Depreciation and amortization

235 230 3 % 696 635 10 %

General and administrative

314 289 9 % 918 856 7 %

Litigation provision 9 341 (97 %)

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Percentage changes are calculated based on unrounded numbers.

• Personnel expenses increased during the three and nine months ended June 30, 2023 primarily due to higher number of employees and compensation, reflecting our strategy to invest in future growth, including acquisitions.

• Marketing expenses increased during the nine months ended June 30, 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 Olympic and Paralympic Winter Games Beijing 2022 in the current period.

• Depreciation and amortization expenses increased during the nine months ended June 30, 2023 primarily due to additional depreciation and amortization from our on-going investments and acquisitions.

• General and administrative expenses increased during the three and nine months ended June 30, 2023 primarily due to higher usage of travel related card benefits, an increase in travel expenses and unfavorable foreign currency fluctuations.

The increase during the nine months ended June 30, 2023 was partially offset by the absence of expenses as a result of the suspension of our operations in Russia.

• Litigation provision decreased during the three and nine months ended June 30, 2023 primarily due to lower accruals related to the U.S.

covered litigation.

• Personnel expenses increased during the three months ended December 31, 2023 primarily due to a higher number of employees and compensation, reflecting our strategy to invest in future growth.

• Marketing expenses decreased during the three months ended December 31, 2023 primarily due to spend related to the FIFA World Cup 2022 TM in the prior year and absent in the current year.

• Professional fees increased during the three months ended December 31, 2023 primarily due to higher legal and consulting fees.

• General and administrative expenses increased during the three months ended December 31, 2023 primarily due to higher usage of travel related card benefits and indirect taxes, partially offset by favorable foreign currency fluctuations.

• Litigation provision decreased during the three months ended December 31, 2023 primarily due to the accrual related to the U.S.

covered litigation in the prior year and absent in the current year.

See Note 13—Legal Matters to our unaudited consolidated financial statements.

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Three Months Ended

June 30, Nine Months Ended

(in millions, except percentages)

Interest expense $ (187) $ (137) 36 %

Investment income (expense) and other 304 (208) (246 %) 412 (79) (625 %)

Investment income (expense) and other 275 24 NM

Total non-operating income (expense) $ 88 $ (113) (178 %)

NM - Not meaningful

(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 months ended June 30, 2023 primarily driven by losses from derivative instruments and higher interest related to income tax liabilities.

Interest expense increased during the nine months ended June 30, 2023 primarily driven by losses from derivative instruments, partially offset by lower interest related to indirect taxes.

• Investment income (expense) and other increased during the three months ended June 30, 2023, primarily due to gains on our investments and higher interest income on our cash and investments.

Investment income (expense) and other increased during the nine months ended June 30, 2023, primarily due to higher interest income on our cash and investments and lower losses on our investments.

• Interest expense increased during the three months ended December 31, 2023 primarily due to losses from derivative instruments and the discrete tax benefit recognized during the prior year, partially offset by lower interest expense related to lower outstanding debt.

• Investment income (expense) and other increased during the three months ended December 31, 2023, primarily due to higher interest income on our cash and investments and gains on our investments.

Effective Income Tax Rate

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Three Months Ended

June 30, Nine Months Ended

2023 2022 2023 2022

Effective income tax rate 19 % 16 %

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.

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

Liquidity and Capital Resources

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

Nine Months Ended

Three Months Ended

(in millions)

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Financing activities $ (4,379) $ (6,347)

Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents 844 (725)

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

$ 662 $ (803)

Operating activities.

Cash provided by operating activities for the nine months ended June 30, 2023 was higher than the prior-year comparable period primarily due to growth in our underlying business, partially offset by higher incentive and litigation payments.

Cash provided by operating activities for the three months ended December 31, 2023 was lower than the prior-year comparable period primarily due to higher incentive payments and higher litigation payments, partially offset by continued growth in our underlying business.

Investing activities.

Cash used in investing activities for the nine months ended June 30, 2023 was lower than the prior-year comparable period primarily due to the absence of cash paid for acquisitions, lower purchases of investment securities and cash received from the settlement of net investment hedge derivative instruments in the current year.

Cash used in investing activities for the three months ended December 31, 2023 was higher than the prior-year comparable period primarily due to higher purchases of investment securities and cash received from the settlement of net investment hedge derivative instruments in the prior year.

Financing activities.

Cash used in financing activities for the nine months ended June 30, 2023 was higher than the prior-year comparable period primarily due to the absence of proceeds from the issuance of senior notes, the principal debt payment upon maturity of our December 2022 senior notes and higher dividends paid, partially offset by lower share repurchases.

Cash used in financing activities for the three months ended December 31, 2023 was lower than the prior-year comparable period primarily due to the principal debt payment upon maturity of our December 2022 senior notes in the prior year, partially offset by higher share repurchases and higher dividends paid.

See Note 7—Debt and Note 9—Stockholders’ Equity to our unaudited consolidated financial statements .

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

Credit facility extension.

In May 2023, we 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.

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

Uses of Liquidity

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Common stock repurchases.

During the nine months ended June 30, 2023, we repurchased shares of our class A common stock in the open market for $8.4 billion.

As of June 30, 2023, our repurchase program had remaining authorized funds of $8.8 billion.

During the three months ended December 31, 2023, we repurchased shares of our class A common stock in the open market for $3.6 billion.

As of December 31, 2023, our share repurchase programs had remaining authorized funds of $26.4 billion.

See Note 9—Stockholders’ Equity to our unaudited consolidated financial statements.

During the nine months ended June 30, 2023, we declared and paid $2.8 billion in dividends to holders of our common and preferred stock.

On July 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).

During the three months ended December 31, 2023, we declared and paid $1.1 billion in dividends to holders of our common and preferred stock.

On January 23, 2024, our board declared a quarterly cash dividend of $0.52 per share of class A common stock (determined in the case of class B-1 and C common stock and series A, B and C convertible participating preferred stock on an as-converted basis).

See Note 9—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.

We expect to continue paying quarterly dividends in cash, subject to approval by the board.

All preferred and class B-1 and C common stock will share ratably on an as-converted basis in such future dividends.

Senior notes .

During the nine months ended June 30, 2023, we repaid $2.25 billion of principal upon maturity of our December 2022 senior notes.

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

Pending acquisition .

In June 2023, we entered into a definitive agreement to acquire Pismo for $1.0 billion in cash.

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

During the nine months ended June 30, 2023, we deposited $850 million into the U.S.

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

The balance of this account as of June 30, 2023 was $1.6 billion and is reflected as restricted cash in our consolidated balance sheets.

See Note 5—U.S.

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

Acquisition .

On January 16 2024, we acquired Pismo for $1.0 billion in cash.

See Note 2—Acquisitions 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.

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expense s.

This standard also enhances interim disclosure requirements and provides new segment disclosure requirements for entities with a single reportable segment.

This ASU is effective for our annual periods beginning October 1, 2024, and interim periods beginning October 1, 2025, and requires retrospective application to all prior periods presented.

We are currently evaluating the impact of the ASU on our disclosures.

In December 2023, the FASB issued ASU 2023-09, which provides improvements to income tax disclosures.

This standard requires disaggregated information related to effective tax rate reconciliation as well as information on income taxes paid.

This ASU is effective for our annual periods beginning October 1, 2025, and requires prospective application with the option to apply the standard retrospectively.

We are currently evaluating the impact of the ASU on our disclosures.

Quantitative and Qualitative Disclosures about Market Risk

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis