UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 10-Q


þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended December 31, 20172022


OR


o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to        
Commission file number 001-33977
logo.gifv-20221231_g1.gif
VISA INC.
(Exact name of Registrant as specified in its charter)
Delaware26-0267673
(State or other jurisdiction
of incorporation or organization)
(IRS Employer
Identification No.)
Delaware26-0267673
(State or other jurisdiction
of incorporation or organization)
(IRS Employer
Identification No.)
P.O. Box 8999
San Francisco, California
94128-8999
San Francisco,California
(Address of principal executive offices)(Zip Code)
(650) 432-3200
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Class A Common Stock, par value $0.0001 per shareVNew York Stock Exchange
1.500% Senior Notes due 2026V26New York Stock Exchange
2.000% Senior Notes due 2029V29New York Stock Exchange
2.375% Senior Notes due 2034V34New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  þ    No  o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  þ    No  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitionthe definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging“emerging growth company"company” in Rule 12b-2 of the Exchange Act.



Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Large accelerated filer  þ
Accelerated filer   o
Smaller reporting company   o
Non-accelerated filer o (Do not check if a smaller reporting company.)
Emerging growth companyo
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  o No  þ
As of January 26, 201818, 2023, there were 1,802,624,5781,624,954,064 shares outstanding of the registrant’s class A common stock, par value $0.0001 per share, 245,513,385 shares outstanding of the registrant’s class B common stock, par value $0.0001 per share, and 12,400,2619,745,019 shares outstanding of the registrant’s class C common stock, par value $0.0001 per share,share.


Table of Visa Inc. outstanding.Contents

VISA INC.
TABLE OF CONTENTS
Page
Page
PART I.
Item 1.
Item 2.
Item 3.
Item 4.
PART II.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.

3

PART I. FINANCIAL INFORMATION
ITEM 1.Financial Statements (Unaudited)
VISA INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
December 31,
2022
September 30,
2022
 (in millions, except per share data)
Assets
Cash and cash equivalents$13,334 $15,689 
Restricted cash equivalents—U.S. litigation escrow1,705 1,449 
Investment securities2,785 2,833 
Settlement receivable2,127 1,932 
Accounts receivable2,113 2,020 
Customer collateral2,591 2,342 
Current portion of client incentives1,402 1,272 
Prepaid expenses and other current assets1,802 2,668 
Total current assets27,859 30,205 
Investment securities2,735 2,136 
Client incentives3,657 3,348 
Property, equipment and technology, net3,236 3,223 
Goodwill18,024 17,787 
Intangible assets, net26,307 25,065 
Other assets3,569 3,737 
Total assets$85,387 $85,501 
Liabilities
Accounts payable$258 $340 
Settlement payable3,573 3,281 
Customer collateral2,591 2,342 
Accrued compensation and benefits736 1,359 
Client incentives6,553 6,099 
Accrued liabilities3,940 3,726 
Current maturities of debt 2,250 
Accrued litigation1,702 1,456 
Total current liabilities19,353 20,853 
Long-term debt20,487 20,200 
Deferred tax liabilities5,443 5,332 
Other liabilities3,180 3,535 
Total liabilities48,463 49,920 
Equity
Series A, Series B and Series C convertible participating preferred stock (preferred stock), $0.0001 par value: 25 shares authorized and 5 (Series A less than one, Series B 2, Series C 3) shares issued and outstanding1,981 2,324 
Class A, Class B and Class C common stock and additional paid-in capital, $0.0001 par value: 2,003,341 shares authorized (Class A 2,001,622, Class B 622, Class C 1,097); 1,881 (Class A 1,626, Class B 245, Class C 10) and 1,890 (Class A 1,635, Class B 245, Class C 10) shares issued and outstanding19,827 19,545 
Right to recover for covered losses(28)(35)
Accumulated income16,403 16,116 
Accumulated other comprehensive income (loss), net:
Investment securities(94)(106)
Defined benefit pension and other postretirement plans(167)(169)
Derivative instruments(213)418 
Foreign currency translation adjustments(785)(2,512)
Total accumulated other comprehensive income (loss), net(1,259)(2,369)
Total equity36,924 35,581 
Total liabilities and equity$85,387 $85,501 
 December 31,
2017
 September 30,
2017
 (in millions, except par value data)
Assets   
Cash and cash equivalents$8,138
 $9,874
Restricted cash—U.S. litigation escrow (Note 2)883
 1,031
Investment securities (Note 3):   
Trading106
 82
Available-for-sale3,307
 3,482
Settlement receivable1,618
 1,422
Accounts receivable1,281
 1,132
Customer collateral (Note 5)1,155
 1,106
Current portion of client incentives295
 344
Prepaid expenses and other current assets504
 550
Total current assets17,287
 19,023
Investment securities, available-for-sale (Note 3)2,674
 1,926
Client incentives557
 591
Property, equipment and technology, net2,238
 2,253
Other assets1,127
 1,226
Intangible assets, net 28,109
 27,848
Goodwill 15,162
 15,110
Total assets$67,154
 $67,977
Liabilities   
Accounts payable$108
 $179
Settlement payable2,302
 2,003
Customer collateral (Note 5)1,155
 1,106
Accrued compensation and benefits389
 757
Client incentives2,355
 2,089
Accrued liabilities1,224
 1,129
Current maturities of long-term debt (Note 4)
 1,749
Accrued litigation (Note 11)830
 982
Total current liabilities8,363
 9,994
Long-term debt (Note 4)16,621
 16,618
Deferred tax liabilities5,107
 5,980
Deferred purchase consideration1,330
 1,304
Other liabilities2,332
 1,321
Total liabilities33,753
 35,217
Equity   
Preferred stock, $0.0001 par value, 25 shares authorized and 5 shares issued and outstanding as follows:   
Series A convertible participating preferred stock, none issued (Note 7)
 
Series B convertible participating preferred stock, 2 shares issued and outstanding at December 31, 2017 and September 30, 2017 (the “UK&I preferred stock”) (Note 7)2,295
 2,326
Series C convertible participating preferred stock, 3 shares issued and outstanding at December 31, 2017 and September 30, 2017 (the “Europe preferred stock”) (Note 7)3,181
 3,200
Class A common stock, $0.0001 par value, 2,001,622 shares authorized, 1,805 and 1,818 shares issued and outstanding at December 31, 2017 and September 30, 2017, respectively (Note 7)
 
Class B common stock, $0.0001 par value, 622 shares authorized, 245 shares issued and outstanding at December 31, 2017 and September 30, 2017 (Note 7)
 
Class C common stock, $0.0001 par value, 1,097 shares authorized, 12 and 13 shares issued and outstanding at December 31, 2017 and September 30, 2017, respectively (Note 7)
 
Right to recover for covered losses (Note 2)(5) (52)
Additional paid-in capital16,761
 16,900
Accumulated income9,966
 9,508
Accumulated other comprehensive income (loss), net:   
Investment securities, available-for-sale61
 73
Defined benefit pension and other postretirement plans(76) (76)
Derivative instruments classified as cash flow hedges(33) (36)
Foreign currency translation adjustments1,251
 917
Total accumulated other comprehensive income, net1,203
 878
Total equity33,401
 32,760
Total liabilities and equity$67,154
 $67,977

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

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Table of Contents

VISA INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
 Three Months Ended
December 31,
 20222021
 (in millions, except per share data)
Net revenues$7,936 $7,059 
Operating Expenses
Personnel1,337 1,125 
Marketing332 280 
Network and processing178 190 
Professional fees109 100 
Depreciation and amortization227 198 
General and administrative322 242 
Litigation provision341 148 
Total operating expenses2,846 2,283 
Operating income5,090 4,776 
Non-operating Income (Expense)
Interest expense(137)(134)
Investment income (expense) and other24 255 
Total non-operating income (expense)(113)121 
Income before income taxes4,977 4,897 
Income tax provision798 938 
Net income$4,179 $3,959 
Basic Earnings Per Share
Class A common stock$1.99 $1.84 
Class B common stock$3.19 $2.98 
Class C common stock$7.96 $7.35 
Basic Weighted-average Shares Outstanding
Class A common stock1,629 1,669 
Class B common stock245 245 
Class C common stock10 10 
Diluted Earnings Per Share
Class A common stock$1.99 $1.83 
Class B common stock$3.19 $2.98 
Class C common stock$7.95 $7.34 
Diluted Weighted-average Shares Outstanding
Class A common stock2,102 2,159 
Class B common stock245 245 
Class C common stock10 10 
 Three Months Ended
December 31,
 2017 2016
 (in millions, except per share data)
Operating Revenues   
Service revenues$2,146
 $1,918
Data processing revenues2,147
 1,892
International transaction revenues1,666
 1,489
Other revenues229
 203
Client incentives(1,326) (1,041)
Net operating revenues4,862
 4,461
    
Operating Expenses    
Personnel679
 571
Marketing223
 218
Network and processing160
 145
Professional fees92
 80
Depreciation and amortization145
 146
General and administrative236
 186
Litigation provision (Note 11)
 15
Total operating expenses1,535
 1,361
Operating income3,327
 3,100
    
Non-operating Income (Expense)   
Interest expense(154) (140)
Other66
 19
Total non-operating expense(88) (121)
Income before income taxes3,239
 2,979
Income tax provision (Note 10)717
 909
Net income$2,522
 $2,070
    
Basic earnings per share (Note 8)   
Class A common stock$1.07
 $0.86
Class B common stock$1.77
 $1.41
Class C common stock$4.30
 $3.43
    
Basic weighted-average shares outstanding (Note 8)   
Class A common stock1,811
 1,860
Class B common stock245
 245
Class C common stock13
 17
    
Diluted earnings per share (Note 8)   
Class A common stock$1.07
 $0.86
Class B common stock$1.77
 $1.41
Class C common stock$4.29
 $3.42
    
Diluted weighted-average shares outstanding (Note 8)   
Class A common stock2,353
 2,421
Class B common stock245
 245
Class C common stock13
 17


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

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Table of Contents

VISA INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
 Three Months Ended
December 31,
 20222021
 (in millions)
Net income$4,179 $3,959 
Other comprehensive income (loss):
Investment securities:
Net unrealized gain (loss)15 (10)
Income tax effect(3)
Defined benefit pension and other postretirement plans:
Net unrealized actuarial gain (loss) and prior service credit (cost)2 
Income tax effect(1)— 
Reclassification adjustments1 
Derivative instruments:
Net unrealized gain (loss)(116)114 
Income tax effect14 (22)
Reclassification adjustments(7)(6)
Income tax effect(4)— 
Foreign currency translation adjustments1,209 (588)
Other comprehensive income (loss), net of tax1,110 (508)
Comprehensive income$5,289 $3,451 
 Three Months Ended
December 31,
 2017 2016
 (in millions)
Net income$2,522
 $2,070
Other comprehensive income (loss), net of tax:   
Investment securities, available-for-sale:   
Net unrealized gain (loss)9
 (3)
Income tax effect(3) (1)
Reclassification adjustment for net gain realized in net income(28) 
Income tax effect10
 
Defined benefit pension and other postretirement plans:   
Amortization of actuarial loss and prior service credit realized in net income
 6
Income tax effect
 (2)
Derivative instruments classified as cash flow hedges:   
Net unrealized (loss) gain(1) 74
Income tax effect(5) (7)
Reclassification adjustment for net loss realized in net income11
 12
Income tax effect(2) (2)
Foreign currency translation adjustments334
 (988)
Other comprehensive income (loss), net of tax325
 (911)
Comprehensive income$2,847
 $1,159



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

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Table of Contents

VISA INC.
CONSOLIDATED STATEMENTS OF CASH FLOWSCHANGES IN EQUITY
(UNAUDITED)
 Three Months Ended
December 31,
 2017 2016
 (in millions)
Operating Activities   
Net income$2,522

$2,070
Adjustments to reconcile net income to net cash provided by operating activities:   
Client incentives1,326

1,041
Share-based compensation (Note 9)68

45
Depreciation and amortization of property, equipment, technology and intangible assets145

146
Deferred income taxes(919)
77
Right to recover for covered losses recorded in equity (Note 2)(3)
(94)
Other(23)
13
Change in operating assets and liabilities:



Settlement receivable(180)
56
Accounts receivable(146)
(89)
Client incentives(986)
(1,129)
Other assets92

66
Accounts payable(51)
(102)
Settlement payable275

79
Accrued and other liabilities794

316
Accrued litigation (Note 11)(152)
13
Net cash provided by operating activities2,762

2,508
Investing Activities   
Purchases of property, equipment, technology and intangible assets(141)
(171)
Investment securities, available-for-sale:



Purchases(1,636)
(1,032)
Proceeds from maturities and sales1,076

788
Purchases of / contributions to other investments(6)
(2)
Net cash used in investing activities(707)
(417)
Financing Activities   
Repurchase of class A common stock (Note 7)(1,778) (1,893)
Repayments of long-term debt (Note 4)(1,750) 
Dividends paid (Note 7)(458) (399)
Proceeds from issuance of commercial paper
 566
Payments from litigation escrow account—U.S. retrospective responsibility plan (Note 2 and Note 11)150
 
Cash proceeds from issuance of common stock under employee equity plans53
 56
Restricted stock and performance-based shares settled in cash for taxes(88) (60)
Net cash used in financing activities(3,871) (1,730)
Effect of exchange rate changes on cash and cash equivalents80
 (156)
(Decrease) increase in cash and cash equivalents(1,736) 205
Cash and cash equivalents at beginning of period9,874
 5,619
Cash and cash equivalents at end of period$8,138
 $5,824
Supplemental Disclosure   
Income taxes paid, net of refunds$183
 $96
Interest payments on debt (Note 4)$241
 $244
Accruals related to purchases of property, equipment, technology and intangible assets$26
 $69
Three Months Ended December 31, 2022
 Preferred StockCommon Stock and Additional Paid-in CapitalRight to Recover for Covered LossesAccumulated
Income
Accumulated
Other
Comprehensive
 Income (Loss), Net
Total
Equity
 SharesAmountSharesAmount
 (in millions, except per share data)
Balance as of September 30, 2022$2,324 (1)1,890 $19,545 $(35)$16,116 $(2,369)$35,581 
Net income4,179 4,179 
Other comprehensive income (loss), net of tax1,110 1,110 
VE territory covered losses incurred(8)(8)
Recovery through conversion rate adjustment(14)15 
Conversion to class A common stock upon sales into public market— (2)(329)329 — 
Share-based compensation, net of forfeitures177 177 
Stock issued under equity plans56 56 
Restricted stock and performance-based shares settled in cash for taxes— (2)(112)(112)
Cash dividends declared and paid, at a quarterly amount of $0.45 per class A common stock(945)(945)
Repurchase of class A common stock(16)(168)(2,947)(3,115)
Balance as of December 31, 20225 $1,981 (1)1,881 $19,827 $(28)$16,403 $(1,259)$36,924 
(1)As of December 31, 2022 and September 30, 2022, the book value of series A preferred stock was $723 million and $1.0 billion, respectively. Refer to Note 4—U.S. and Europe Retrospective Responsibility Plans for the book value of series B and series C preferred stock.

(2)Increase or decrease is less than one million shares.
See accompanying notes, which are an integral part of these unaudited consolidated financial statements.

7
6


VISA INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—(Continued)
(UNAUDITED)
Three Months Ended December 31, 2021
 Preferred StockCommon Stock and Additional Paid-in CapitalRight to Recover for Covered LossesAccumulated
Income
Accumulated
Other
Comprehensive
 Income (Loss), Net
Total
Equity
 SharesAmountSharesAmount
 (in millions, except per share data)
Balance as of September 30, 2021$3,080 (1)1,932 $18,855 $(133)$15,351 $436 $37,589 
Net income3,959 3,959 
Other comprehensive income (loss), net of tax(508)(508)
VE territory covered losses incurred(7)(7)
Recovery through conversion rate adjustment(29)29 — 
Conversion of class A common stock upon sales into public market— (2)(56)56 — 
Share-based compensation, net of forfeitures

128 128 
Stock issued under equity plans59 59 
Restricted stock and performance-based shares settled in cash for taxes— (2)(113)(113)
Cash dividends declared and paid, at a quarterly amount of $0.375 per class A common stock(809)(809)
Repurchase of class A common stock(19)(209)(3,895)(4,104)
Balance as of December 31, 2021$2,995 (1)1,916 $18,776 $(111)$14,606 $(72)$36,194 
(1)As of December 31, 2021 and September 30, 2021, the book value of series A preferred stock was $430 million and $486 million, respectively. Refer to Note 4—U.S. and Europe Retrospective Responsibility Plans for the book value of series B and series C preferred stock.
(2)Increase or decrease is less than one million shares.


See accompanying notes, which are an integral part of these unaudited consolidated financial statements.
8

VISA INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 Three Months Ended
December 31,
 20222021
 (in millions)
Operating Activities
Net income$4,179 $3,959 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Client incentives2,786 2,371 
Share-based compensation177 128 
Depreciation and amortization of property, equipment, technology and intangible assets227 198 
Deferred income taxes(132)(15)
VE territory covered losses incurred(8)(7)
(Gains) losses on equity investments, net106 (231)
Other(26)(32)
Change in operating assets and liabilities:
Settlement receivable(54)(76)
Accounts receivable(60)(213)
Client incentives(2,743)(2,339)
Other assets160 (163)
Accounts payable(64)(9)
Settlement payable44 409 
Accrued and other liabilities(666)206 
Accrued litigation245 46 
Net cash provided by (used in) operating activities4,171 4,232 
Investing Activities
Purchases of property, equipment and technology(249)(173)
Investment securities:
Purchases(1,995)(951)
Proceeds from maturities and sales1,310 1,374 
Acquisitions, net of cash acquired (832)
Purchases of other investments(20)(37)
Settlement of derivative instruments402 — 
Other investing activities42 72 
Net cash provided by (used in) investing activities(510)(547)
Financing Activities
Repurchase of class A common stock(3,115)(4,104)
Repayments of debt(2,250)— 
Dividends paid(945)(809)
Cash proceeds from issuance of class A common stock under equity plans56 59 
Restricted stock and performance-based shares settled in cash for taxes(112)(113)
Other financing activities19 — 
Net cash provided by (used in) financing activities(6,347)(4,967)
Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents692 (194)
Increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents(1,994)(1,476)
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period20,377 19,799 
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period$18,383 $18,323 
Supplemental Disclosure
Cash paid for income taxes, net$721 $268 
Interest payments on debt$244 $244 
Accruals related to purchases of property, equipment and technology$27 $53 


See accompanying notes, which are an integral part of these unaudited consolidated financial statements.
9

VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2017
(UNAUDITED)
Note 1—Summary of Significant Accounting Policies
Organization. Visa Inc. ("Visa"and its subsidiaries (Visa or the "Company")Company) is a global payments technology company that enables fast, securefacilitates global commerce and reliable electronic paymentsmoney movement across more than 200 countries and territories. Visa and its wholly-owned consolidated subsidiaries, including Visa U.S.A. Inc. ("Visa U.S.A."), Visa International Service Association ("Visa International"), Visa Worldwide Pte. Limited, Visa Europe Limited ("Visa Europe"), Visa Canada Corporation, Visa Technology & Operations LLC and CyberSource Corporation, operateoperates one of the world’s largest retail electronic payments networksnetwork — VisaNet — which facilitatesprovides transaction processing services (primarily authorization, clearing and settlement of payment transactionssettlement). The Company offers products, solutions and enablesservices that facilitate secure, reliable and efficient money movement for participants in the Company to provide its financial institution and merchant clients a wide range of products, platforms and value-added services. VisaNet also offers fraud protection for account holders and assured payment for merchants.ecosystem. Visa is not a bankfinancial institution and does not issue cards, extend credit or set rates and fees for account holders onof Visa products. In most cases, account holder and merchant relationships belong to, and are managed by, Visa'sVisa’s financial institution clients.
Consolidation and basis of presentation. The accompanying unaudited consolidated financial statements include the accounts of Visa and its consolidated entities and are presented in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP")(U.S. GAAP). The Company consolidates its majority-owned and controlled entities, including variable interest entities ("VIEs")(VIEs) for which the Company is the primary beneficiary. 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.
The accompanying unaudited consolidated financial statements are presented in accordance with the 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. GAAP. Reference should be made to the Visa Annual Report on Form 10-K for the year ended September 30, 20172022 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'sCompany’s financial position, results of operations and cash flows for the interim periods presented.
Recently Issued and Adopted Accounting Pronouncements.
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, which requires an entity to recognize the amount The results of revenue to which it expects to be entitledoperations for interim periods are not necessarily indicative of results for the transferfull year.
Use of goods or services to customers. estimates. The ASU will replace existing revenue recognition guidancepreparation of the accompanying unaudited consolidated financial statements in conformity with U.S. GAAP when it becomes effective. Subsequently,requires management to make estimates and assumptions about future events. These estimates and assumptions affect the FASB also issued a seriesreported amounts of amendments toassets and liabilities and disclosure of contingent assets and liabilities at the new revenue standard. The Company will adoptdate of the standard effective October 1, 2018, and expects to adopt the standard using the modified retrospective transition method. The Company expects that the new standard will primarily impact recognition timing for certain fixed incentives and price discounts provided to clients, and the classification of certain client incentives between contra revenues and operating expenses. The Company is still in the process of quantifying the full effect that ASU 2014-09 and all of its related subsequent updates will have on itsunaudited consolidated financial statements and related disclosures. The impactreported amounts of revenues and expenses during the new standard to future financial results is unknowable as it is not possible to estimate the impact to the recognition of new customer contracts whichreporting period. These estimates may be executed in future periods. The Company has completed an assessment of its existing customer contracts through December 31, 2017. Application of the new standard to consolidated financial statements for the first quarter of fiscal 2018 would not have resulted in a material impact. The Company will continue to assess the impact of the new standardchange as new customer contracts are executed going forward.
In March 2016, the FASB issued ASU 2016-05, which clarifies that a changeevents occur and additional information is obtained, and will be recognized in the counterparty to a derivative instrument that has been designated as the hedging instrument under Topic 815, Derivatives and Hedging, does not,period in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. The Company adopted the standard effective October 1, 2017. The adoption did not have a material impact on the consolidated financial statements.

which such changes occur. Future actual results could differ materially from these estimates.
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10

VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—STATEMENTS (UNAUDITED)—(Continued)


Note 2—Revenues
In March 2016,The nature, amount, timing and uncertainty of the FASB issued ASU 2016-06, which clarifiesCompany’s revenues and cash flows and how they are affected by economic factors are most appropriately depicted through the requirements for assessing whether contingent call/put options that can accelerateCompany’s revenue categories and geographical markets. The following tables disaggregate the payment of principal on debt instruments are clearlyCompany’s net revenues by revenue category and closely related to their debt hosts. An entity performing the assessment is required to assess the embedded call/put options solely in accordance with a four-step decision sequence. by geography:
Three Months Ended
December 31,
20222021
(in millions)
Service revenues$3,511 $3,193 
Data processing revenues3,827 3,614 
International transaction revenues2,797 2,174 
Other revenues587 449 
Client incentives(2,786)(2,371)
Net revenues$7,936 $7,059 

Three Months Ended
December 31,
20222021
(in millions)
U.S.$3,567 $3,178 
International4,369 3,881 
Net revenues$7,936 $7,059 
Note 3—Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents
The Company adopted the standard effective October 1, 2017. The adoption did not have a material impact onreconciles cash, cash equivalents, restricted cash and restricted cash equivalents reported in the consolidated financial statements.
In March 2016,balance sheets that aggregate to the FASB issued ASU 2016-07, which eliminates the requirement that an entity retroactively adopt the equity method of accounting if an investment qualifies for use of the equity method as a result of an increasebeginning and ending balances shown in the levelconsolidated statements of ownership or degree of influence. The equity method investor is required to add the cost of acquiring the additional interest in the investee to the current basis of the investor's previously held interest and adopt the equity method of accountingcash flows as of the date the investment becomes qualified for equity method accounting. The Company adopted the standard effective October 1, 2017. The adoption did not have a material impact on the consolidated financial statements.follows:
December 31,
2022
September 30,
2022
(in millions)
Cash and cash equivalents$13,334 $15,689 
Restricted cash and restricted cash equivalents:
U.S. litigation escrow1,705 1,449 
Customer collateral2,591 2,342 
Prepaid expenses and other current assets753 897 
Cash, cash equivalents, restricted cash and restricted cash equivalents$18,383 $20,377 
Note 2—4—U.S. and Europe Retrospective Responsibility Plans
U.S. Retrospective Responsibility Plan
Under the terms of the U.S. retrospective responsibility plan, the Company maintains an escrow account from which settlements of, or judgments in, certain litigation referred to as the "U.S.“U.S. covered litigation"litigation” are paid. The escrow funds are held in money market investments along with interest income earned, less applicable taxes, and are classified as restricted cash on the consolidated balance sheets. The balance of the escrow account was $0.9 billion at December 31, 2017 and $1.0 billion at September 30, 2017. The Company paid $150 million from the litigation escrow account during the three months ended December 31, 2017. See Note 11—Legal Matters.
The accrual related to the U.S. covered litigation could be either higher or lower than the U.S. litigation escrow account balance. The Company did not record an additional accrual for the U.S. covered litigation during the three months ended December 31, 2017. See Note 11—12—Legal Matters.
11

VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)
The following table presents the changes in the restricted cash equivalents—U.S. litigation escrow account:
Three Months Ended
December 31,
20222021
 (in millions)
Balance at beginning of period$1,449 $894 
Deposits into the litigation escrow account350 250 
Payments to opt-out merchants(1), net of interest earned on escrow funds
(94)— 
Balance at end of period$1,705 $1,144 
(1)These payments are associated with the interchange multidistrict litigation. See Note 12—Legal Matters.
Europe Retrospective Responsibility Plan
The Company,Visa Inc., Visa International and Visa Europe or their affiliates are parties to certain existing and potential litigation relating to the setting of multilateral interchange fee rates in the Visa Europe territory (the "VE(VE territory covered litigation")litigation). Under the terms of the Europe retrospective responsibility plan, the Company is entitled to recover certain losses resulting from VE territory covered litigation (the "VE(VE territory covered losses")losses) through a periodic adjustment to the class A common stock conversion rates applicable to the UK&Iseries B and EuropeC preferred stock. VE territory covered losses are recorded in "righta contra-equity account referred to as “right to recover for covered losses"losses” within stockholders’ equity before the corresponding adjustment to the applicable conversion rate is effected. Adjustments to the conversion rate may be executed once in any six-month period unless a single, individual loss greater than €20 million is incurred, in which case, the six-month limitation does not apply. When the adjustment to the conversion rate is made, the amount previously recorded in "right“right to recover for covered losses"losses” as contra-equity is then recorded against the book value of the preferred stock within stockholders'stockholders’ equity.
During the three months ended December 31, 2017, the Company recovered $50 million of VE territory covered losses through adjustments to the class A common stock conversion rates applicable to the UK&I and Europe preferred stock, from 13.077 and 13.948, respectively, at September 30, 2017 to 12.966 and 13.893, respectively, at December 31, 2017.

8

VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)


The following table sets forthpresents the activities related to VE territory covered losses in preferred stock and "right“right to recover for covered losses"losses” within equity during the three months ended December 31, 2017. stockholders’ equity:
Preferred StockRight to Recover for Covered Losses
Series BSeries C
(in millions)
Balance as of September 30, 2022$460 $812 $(35)
VE territory covered losses incurred(1)
— — (8)
Recovery through conversion rate adjustment(2)
(7)(7)15 
Balance as of December 31, 2022$453 $805 $(28)
Preferred StockRight to Recover for Covered Losses
Series BSeries C
(in millions)
Balance as of September 30, 2021$1,071 $1,523 $(133)
VE territory covered losses incurred(1)
— — (7)
Recovery through conversion rate adjustment(26)(3)29 
Balance as of December 31, 2021$1,045 $1,520 $(111)
(1)VE territory covered losses incurred reflect settlements with merchants and additional legal costs. See Note 11—12—Legal Matters.Matters.
(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.
12

VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)
 Preferred Stock Right to Recover for Covered Losses
 UK&I Europe 
 (in millions)
Balance as of September 30, 2017$2,326
 $3,200
 $(52)
VE territory covered losses incurred
 
 (3)
Recovery through conversion rate adjustment(31) (19) 50
Balance as of December 31, 2017$2,295
 $3,181
 $(5)
The following table sets forthpresents the as-converted value of the preferred stock available to recover VE territory covered losses compared to the book value of preferred sharesstock recorded in stockholders'stockholders’ equity within the Company's unauditedCompany’s consolidated balance sheet assheets:
December 31, 2022September 30, 2022
As-converted Value of Preferred Stock(1),(2)
Book Value of Preferred Stock(1)
As-converted Value of Preferred Stock(1),(3)
Book Value of Preferred Stock(1)
(in millions)
Series B preferred stock$1,524 $453 $1,309 $460 
Series C preferred stock2,383 805 2,044 812 
Total3,907 1,258 3,353 1,272 
Less: right to recover for covered losses(28)(28)(35)(35)
Total recovery for covered losses available$3,879 $1,230 $3,318 $1,237 
(1)Figures in the table may not recalculate exactly due to rounding. As-converted and book values are based on unrounded numbers.
(2)As of December 31, 20172022, 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; (b) 2.958 and 3.634, the class A common stock conversion rate applicable to the series B and C preferred stock outstanding, respectively; and (c) $207.76, Visa’s class A common stock closing stock price.
(3)As of September 30, 2017.(1)2022, 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; (b) 2.971 and 3.645, the class A common stock conversion rate applicable to the series B and C preferred stock outstanding, respectively; and (c) $177.65, Visa’s class A common stock closing stock price.
13
 December 31, 2017 September 30, 2017
 
As-Converted Value of Preferred Stock(2)
 Book Value of Preferred Stock 
As-Converted Value of Preferred Stock(3)
 Book Value of Preferred Stock
 (in millions)
UK&I preferred stock$3,667
 $2,295
 $3,414
 $2,326
Europe preferred stock5,001
 3,181
 4,634
 3,200
Total8,668
 5,476
 8,048
 5,526
Less: right to recover for covered losses(5) (5) (52) (52)
Total recovery for covered losses available$8,663
 $5,471
 $7,996
 $5,474
(1)
Figures in the table may not recalculate exactly due to rounding. As-converted and book values are based on unrounded numbers.
(2)
The as-converted value of preferred stock is calculated as the product of: (a) 2 million and 3 million shares of the UK&I and Europe preferred stock outstanding, respectively, as of December 31, 2017; (b)12.966 and 13.893, the class A common stock conversion rate applicable to the UK&I and Europe preferred stock as of December 31, 2017, respectively; and (c) $114.02, Visa's class A common stock closing stock price as of December 31, 2017.
(3)
The as-converted value of preferred stock is calculated as the product of: (a) 2 million and 3 million shares of the UK&I and Europe preferred stock outstanding, respectively, as of September 30, 2017; (b)13.077 and 13.948, the class A common stock conversion rate applicable to the UK&I and Europe preferred stock as of September 30, 2017, respectively; and (c) $105.24, Visa's class A common stock closing stock price as of September 30, 2017.


9

VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—STATEMENTS (UNAUDITED)—(Continued)


Note 3—5—Fair Value Measurements and Investments
Fair Value Measurements
Assets and Liabilities Measured at Fair Value on a Recurring Basis
 Fair Value Measurements
Using Inputs Considered as
 Level 1Level 2
 December 31,
2022
September 30,
2022
December 31,
2022
September 30,
2022
 (in millions)
Assets
Cash equivalents and restricted cash equivalents:
Money market funds$10,078 $11,736 $ $— 
U.S. government-sponsored debt securities — 400 — 
U.S. Treasury securities180 799  — 
Investment securities:
Marketable equity securities346 437  — 
U.S. government-sponsored debt securities — 964 457 
U.S. Treasury securities4,210 4,005  — 
Other current and non-current assets:
Money market funds22 22  — 
Derivative instruments — 245 1,131 
Total$14,836 $16,999 $1,609 $1,588 
Liabilities
Accrued compensation and benefits:
Deferred compensation liability$184 $146 $ $— 
Accrued and other liabilities:
Derivative instruments — 398 418 
Total$184 $146 $398 $418 
 
Fair Value Measurements
Using Inputs Considered as
 Level 1 Level 2
 December 31,
2017
 September 30,
2017
 December 31,
2017
 September 30,
2017
 (in millions)
Assets       
Cash equivalents and restricted cash:       
Money market funds$5,918
 $5,935
    
U.S. government-sponsored debt securities    $567
 $2,870
Investment securities, trading:       
Equity securities106
 82
    
Investment securities, available-for-sale:       
U.S. government-sponsored debt securities    3,530
 3,663
U.S. Treasury securities2,337
 1,621
    
Equity securities114
 124
    
Prepaid and other current assets:       
Foreign exchange derivative instruments    26
 18
Total$8,475
 $7,762
 $4,123
 $6,551
Liabilities       
Accrued liabilities:       
Foreign exchange derivative instruments    $65
 $98
Total$
 $
 $65
 $98
There were no transfers between Level 1 and Level 2 assets during the three months ended December 31, 2017.
Level 1 assets measured at fair value on a recurring basis. and liabilities. Money market funds, publicly-tradedmarketable equity securities and U.S. Treasury securities are classified as Level 1 within the fair value hierarchy, as fair value is based on unadjusted quoted prices in active markets.markets for identical assets. The Company’s deferred compensation liability is measured at fair value based on marketable equity securities held under the deferred compensation plan.
Level 2 assets and liabilities measured at fair value on a recurring basis. liabilities. The fair value of U.S. government-sponsored debt securities, as provided by third-party pricing vendors, is based on quoted prices in active markets for similar, not identical, assets. The pricing data obtained from outside sources is reviewed internally for reasonableness, compared against benchmark quotes from independent pricing sources, then confirmed or revised accordingly. Foreign exchange derivativeDerivative instruments are valued using inputs that are observable in the market or can be derived principally from or corroborated by observable market data. There were no substantive changes to the valuation techniques
U.S. Government-sponsored Debt Securities and related inputs used to measureU.S. Treasury Securities
The amortized cost, unrealized gains and losses and fair value during the threeof debt securities were as follows:
December 31, 2022
Amortized
Cost
Gross UnrealizedFair
Value
GainsLosses
(in millions)
U.S. government-sponsored debt securities$1,364 $$(1)$1,364 
U.S. Treasury securities4,509 (121)4,390 
Total$5,873 $3 $(122)$5,754 
14

VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)
September 30, 2022
Amortized
Cost
Gross UnrealizedFair
Value
GainsLosses
(in millions)
U.S. government-sponsored debt securities$458 $— $(1)$457 
U.S. Treasury securities4,937 — (133)4,804 
Total$5,395 $— $(134)$5,261 
Debt securities with unrealized losses for less than 12 months ended December 31, 2017.and 12 months or greater were as follows:
Assets Measured
December 31, 2022
Less Than 12 Months12 Months or Greater
Fair ValueGross Unrealized LossesFair ValueGross Unrealized Losses
(in millions)
U.S. government-sponsored debt securities$347 $(1)$— $— 
U.S. Treasury securities1,598 (38)1,966 (83)
Total$1,945 $(39)$1,966 $(83)
September 30, 2022
Less Than 12 Months
Fair ValueGross Unrealized Losses
(in millions)
U.S. government-sponsored debt securities$408 $(1)
U.S. Treasury securities3,507 (133)
Total$3,915 $(134)
The unrealized losses were primarily attributable to changes in interest rates.
The stated maturities of debt securities were as follows:
December 31,
2022
(in millions)
Due within one year$3,019 
Due after 1 year through 5 years2,735 
Total$5,754
Equity Securities
The Company’s non-marketable equity securities are investments in privately held companies without readily determinable market values. These investments are measured at Fair Valuefair value on a Non-recurring Basis
Non-marketable equity investmentsnon-recurring basis and investments accounted for under the equity method. These investments 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'smanagement’s judgment. When certain events or circumstances indicate that impairment may exist, the Company revalues the investments using various assumptions, including the financial metrics and ratios of comparable public companies. There were no significant impairments during the three months ended December 31, 2017 or 2016. These investments totaled $99 million and $94 million at December 31, 2017 and September 30, 2017, respectively, and are classified in other assets on the consolidated balance sheets.

10
15

VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—STATEMENTS (UNAUDITED)—(Continued)


The following table summarizes the total carrying value of the Company’s non-marketable equity securities held as of December 31, 2022 including cumulative unrealized gains and losses:
Non-financial assets
December 31,
2022
(in millions)
Initial cost basis$739 
Adjustments:
Upward adjustments827 
Downward adjustments (including impairment)(349)
Carrying amount, end of period$1,217
Unrealized gains and liabilities. Long-lived assets suchlosses included in the carrying value of the Company’s non-marketable equity securities still held as goodwill, indefinite-lived intangible assets, finite-lived intangible assets,of December 31, 2022 and property, equipment2021 were as follows:
Three Months Ended
December 31,
20222021
(in millions)
Upward adjustments$17 $224 
Downward adjustments (including impairment)$ $— 
For the three months ended December 31, 2022 and technology are considered non-financial assets. The Company does not have any non-financial liabilities measured at fair value on a non-recurring basis. Finite-lived intangible assets primarily consist of customer relationships, trade names and reseller relationships, all of which were obtained through acquisitions.
If2021, the Company were required to perform a quantitative assessment for impairment testingrecognized net unrealized losses of goodwill$102 million and indefinite-lived intangible assets, the fair values would generally be estimated using an income approach. As the assumptions employed to measure these assetsnet unrealized gains of $172 million, respectively, on a non-recurring basis are based on management's judgment using internalmarketable and external data, these fair value determinations are classified as Level 3 in the fair value hierarchy. The Company completed its annual impairment review of its indefinite-lived intangible assets and goodwillnon-marketable equity securities still held as of February 1, 2017, and concluded that there was no impairment. No recent events or changes in circumstances indicate that impairment existed at December 31, 2017.quarter end.
Other Fair Value Disclosures
Long-term debt. Debt. Debt instruments are measured at amortized cost on the Company'sCompany’s unaudited consolidated balance sheet at December 31, 2017.sheets. The fair value of the debt instruments, as provided by third-party pricing vendors, is based on quoted prices in active markets for similar, not identical, assets. The pricing data obtained from outside sources is reviewed internally for reasonableness, compared against benchmark quotes from independent pricing sources, then confirmed or revised accordingly. If measured at fair value in the financial statements, these instruments would be classified as Level 2 in the fair value hierarchy.
The following table presents As of December 31, 2022, the carrying amountvalue and estimated fair value of debt was $20.5 billion and $18.4 billion, respectively. As of September 30, 2022, the Company’scarrying value and estimated fair value of debt in order of maturity:was $22.5 billion and $19.9 billion, respectively.
 December 31, 2017 September 30, 2017
 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value
 (in millions)
1.20% Senior Notes due December 2017$
 $
 $1,749
 $1,751
2.20% Senior Notes due December 20202,991
 2,998
 2,990
 3,031
2.15% Senior Notes due September 2022993
 986
 993
 997
2.80% Senior Notes due December 20222,240
 2,283
 2,240
 2,301
3.15% Senior Notes due December 20253,969
 4,089
 3,967
 4,098
2.75% Senior Notes due September 2027740
 740
 740
 737
4.15% Senior Notes due December 20351,486
 1,665
 1,485
 1,637
4.30% Senior Notes due December 20453,462
 3,983
 3,463
 3,873
3.65% Senior Notes due September 2047740
 770
 740
 746
Total$16,621
 $17,514
 $18,367
 $19,171
Other financial instruments not measured at fair value. The following financial instruments are not measured at     fair value on the Company's unaudited consolidated balance sheet atAs of December 31, 2017, but disclosure2022, the carrying values of their fair values is required: time deposits recorded in prepaid expenses and other current assets, settlement receivable and payable commercial paper and customer collateral. The estimatedcollateral are an approximate fair value of such instruments at December 31, 2017 approximates their carrying 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.
Investments
Available-for-sale investment securities. The Company had $110 million in gross unrealized gainsNon-financial assets. Certain non-financial assets such as goodwill, intangible assets and $12 million in gross unrealized losses atproperty, equipment and technology are subject to non-recurring fair value measurements if they are deemed to be impaired. As of December 31, 2017. There2022, there were $120 million gross unrealized gains and $4 million gross unrealized losses at September 30, 2017. A majority of the Company's available-for-sale investment securities with stated maturities are due within one to two years.

no impairment indicators.
11
16

VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—STATEMENTS (UNAUDITED)—(Continued)


Note 4—6—Debt
The Company had outstanding debt as follows:
December 31,
2022
September 30,
2022
Effective Interest Rate(1)
(in millions, except percentages)
U.S. dollar notes
2.80% Senior Notes due December 2022$ $2,250 2.89 %
3.15% Senior Notes due December 20254,000 4,000 3.26 %
1.90% Senior Notes due April 20271,500 1,500 2.02 %
0.75% Senior Notes due August 2027500 500 0.84 %
2.75% Senior Notes due September 2027750 750 2.91 %
2.05% Senior Notes due April 20301,500 1,500 2.13 %
1.10% Senior Notes due February 20311,000 1,000 1.20 %
4.15% Senior Notes due December 20351,500 1,500 4.23 %
2.70% Senior Notes due April 20401,000 1,000 2.80 %
4.30% Senior Notes due December 20453,500 3,500 4.37 %
3.65% Senior Notes due September 2047750 750 3.73 %
2.00% Senior Notes due August 20501,750 1,750 2.09 %
Euro notes
1.50% Senior Notes due June 20261,447 1,325 1.71 %
2.00% Senior Notes due June 20291,072 982 2.13 %
2.375% Senior Notes due June 2034697 638 2.53 %
Total debt20,966 22,945 
Unamortized discounts and debt issuance costs(171)(173)
Hedge accounting fair value adjustments(2)
(308)(322)
Total carrying value of debt$20,487 $22,450 
Reported as:
Current maturities of debt$ $2,250 
Long-term debt20,487 20,200 
Total carrying value of debt$20,487 $22,450 
 December 31, 2017 September 30, 2017  
 Principal Amount Unamortized Discounts and Debt Issuance Costs Carrying Amount Principal Amount Unamortized Discounts and Debt Issuance Costs Carrying Amount Effective Interest Rate
 (in millions, except percentages)
1.20% Senior Notes due December 2017 (the "2017 Notes")$
 $
 $
 $1,750
 $(1) $1,749
 1.37%
Total current maturities of long-term debt
 
 
 1,750
 (1) 1,749
  
              
2.20% Senior Notes due December 20203,000
 (9) 2,991
 3,000
 (10) 2,990
 2.30%
2.15% Senior Notes due September 20221,000
 (7) 993
 1,000
 (7) 993
 2.30%
2.80% Senior Notes due December 20222,250
 (10) 2,240
 2,250
 (10) 2,240
 2.89%
3.15% Senior Notes due December 20254,000
 (31) 3,969
 4,000
 (33) 3,967
 3.26%
2.75% Senior Notes due September 2027750
 (10) 740
 750
 (10) 740
 2.91%
4.15% Senior Notes due December 20351,500
 (14) 1,486
 1,500
 (15) 1,485
 4.23%
4.30% Senior Notes due December 20453,500
 (38) 3,462
 3,500
 (37) 3,463
 4.37%
3.65% Senior Notes due September 2047750
 (10) 740
 750
 (10) 740
 3.73%
Total long-term debt16,750
 (129) 16,621
 16,750
 (132) 16,618
  
              
Total debt$16,750
 $(129) $16,621
 $18,500
 $(133) $18,367
  
(1)Effective interest rates disclosed do not reflect hedge accounting adjustments.
(2)Represents the fair value of interest rate swap agreements entered into on a portion of the outstanding senior notes.
Senior Notes
On October 11, 2017, the Company redeemed all of the $1.75 billion principal amount outstanding of the 2017 Notes. The redemption was funded with net proceeds from new fixed-rate senior notes issued by the Company in September 2017. As a result of this redemption, we recorded a $1 million loss on extinguishment of debt duringDuring the three months ended December 31, 2017.
The2022, the Company recognized interest expense for therepaid $2.25 billion of principal upon maturity of its senior notes of $138 million and $125 million fordue December 2022.
Non-derivative Financial Instrument Designated as a Net Investment Hedge
During the three months ended December 31, 2017 and 2016, respectively,2022, the Company designated €1.8 billion of the Euro-denominated fixed-rate senior notes (Euro Notes) issued in June 2022 as non-operating expense.a hedge against a portion of the Company’s Euro-denominated net investment in Visa Europe. As of December 31, 2022, all of the €3.0 billion Euro Notes were designated as a net investment hedge.
17

VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)
Note 5—7—Settlement Guarantee Management
The Company indemnifies its clients for settlement losses suffered due to failure of any other clientsclient to fund its settlement obligations in accordance with the Visa operating rules. This indemnification creates settlement risk for the Company due to the difference in timing between the date of a payment transaction and the date of subsequent settlement.
Historically, the Company has experienced minimal losses as a result of its settlement risk guarantee. However, the Company’s future obligations, which could be material under its guarantees, are not determinable as they are dependent upon future events.
The Company’s settlement exposure is limited to the amount of unsettled Visa payment transactions at any point in time. The Company requires certain clients that do not meet its credit standardstime, which vary significantly day to post collateral to offset potential loss from their estimated unsettled transactions. The Company’s estimated maximum settlement exposure was $71.3 billion duringday. During the three months ended December 31, 2017, compared to $67.7 billion during2022, the three months ended September 30, 2017. Of these amounts, $4.5Company’s maximum daily settlement exposure was $123.5 billion and $2.8 billion were covered by collateral at December 31, 2017 and September 30, 2017, respectively. The total available collateral balances presented in the table below were greater than theaverage daily settlement exposure covered by customer collateral held duewas $76.0 billion.
The Company maintains and regularly reviews global settlement risk policies and procedures to instances in which the available collateral exceeded the totalmanage settlement exposure, forwhich may require clients to post collateral if certain financial institutions at each date presented.credit standards are not met. The Company held the following collateral to manage settlement exposure:

December 31,
2022
September 30,
2022
 (in millions)
Restricted cash and restricted cash equivalents$2,591 $2,342 
Pledged securities at market value255 213 
Letters of credit1,659 1,582 
Guarantees984 950 
Total$5,489 $5,087 
12
18

VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—STATEMENTS (UNAUDITED)—(Continued)


Note 8—Stockholders’ Equity
The Company maintained collateral as follows:

December 31,
2017
 September 30,
2017
 (in millions)
Cash equivalents(1)
$1,569
 $1,490
Pledged securities at market value169
 167
Letters of credit1,319
 1,316
Guarantees617
 941
Total$3,674
 $3,914
(1)
Cash collateral held by Visa Europe is not included on the Company's consolidated balance sheets as its clients retain beneficial ownership and the cash is only accessible to the Company in the event of default by the client on its settlement obligations.
The fair value of the settlement risk guarantee is estimated based on a proprietary probability-weighted model and was approximately $3 millionat December 31, 2017 and September 30, 2017. These amounts are reflected in accrued liabilities on the Company's consolidated balance sheets.
Note 6—Pension and Other Postretirement Benefits
The Company sponsors various qualified and non-qualified defined benefit pension and other postretirement benefit plans that provide for retirement and medical benefits for all eligible employees residing in the United States. The Company also sponsors other pension benefit plans that provide benefits for internationally-based employees at certain non-U.S. locations. The components of net periodic benefit cost presented below include the U.S. pension and other postretirement benefit plans and the non-U.S. pension plans, comprising only the Visa Europe plans. Disclosures relating to other non-U.S. pension benefit plans are not included as they are immaterial, individually and in aggregate.
 U.S. Plans Non-U.S. Plans
 Pension Benefits Other Postretirement Benefits Pension Benefits
 Three Months Ended
December 31,
 Three Months Ended
December 31,
 Three Months Ended
December 31,
 2017 2016 2017 2016 2017 2016
 (in millions)
Service cost$
 $
 $
 $
 $1
 $2
Interest cost8
 9
 
 
 3
 3
Expected return on plan assets(17) (18) 
 
 (5) (4)
Amortization of:

   

 

 

  
Prior service credit
 
 
 (1) 
 
Actuarial loss
 4
 
 
 
 
Settlement loss
 2
 
 
 
 
Total net periodic benefit cost$(9) $(3) $
 $(1) $(1) $1

13

VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)


Note 7—Stockholders' Equity
As-Converted ClassAs-converted class A Common Stock.common stock. The number of shares of each series and class, and the number of shares of class A common stock on an as-converted basis atwere as follows:
December 31, 2022September 30, 2022
Shares
Outstanding
Conversion Rate Into 
Class A
Common Stock
As-converted Class A
Common
Stock(1)
Shares
Outstanding
Conversion Rate Into
Class A
Common Stock
As-converted Class A
Common
Stock(1)
(in millions, except conversion rate)
Series A preferred stock (2)100.0000 11 — (2)100.0000 16 
Series B preferred stock2 2.9580 7 2.9710 
Series C preferred stock3 3.6340 11 3.6450 12 
Class A common stock(3)
1,626  1,626 1,635 — 1,635 
Class B common stock245 1.5991 (4)393 245 1.6059 (4)394 
Class C common stock10 4.0000 39 10 4.0000 39 
Total2,087 2,103 
(1)Figures in the table may not recalculate exactly due to rounding. As-converted class A common stock is calculated based on unrounded numbers.
(2)The number of shares outstanding was less than one million.
(3)Class A common stock shares outstanding reflect repurchases that settled on or before December 31, 2017,2022 and September 30, 2022.
(4)The class B to class A common stock conversion rate is presented on a rounded basis. Conversion calculations for dividend payments are as follows:based on a conversion rate rounded to the tenth decimal.
(in millions, except conversion rates)Shares Outstanding 
Conversion Rate
Into Class A
Common Stock
 
As-converted Class A Common
Stock(1)
UK&I preferred stock2
 12.9660
 32
Europe preferred stock3
 13.8930
 44
Class A common stock(2)
1,805
 
 1,805
Class B common stock245
 1.6483
(3) 
405
Class C common stock12
 4.0000
 49
Total    2,335
(1)
Figures in the table may not recalculate exactly due to rounding. As-converted class A common stock is calculated based on unrounded numbers.
(2)
Class A common stock shares outstanding exclude repurchases traded but not yet settled on or before December 31, 2017.
(3)
The class B to class A common stock conversion rate is presented on a rounded basis. Conversion calculations for dividend payments are based on a conversion rate rounded to the tenth decimal.
Reduction in as-converted shares. DuringThe following table presents the reduction in the number of as-converted class B common stock after deposit into the U.S. litigation escrow account for the three months ended December 31, 2017, total as-converted2022 and 2021.
Three Months Ended
December 31,
20222021
(in millions, except per share data)
Reduction in equivalent number of class A common stock2 
Effective price per share(1)
$209.14 $217.61 
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 was reduced by 17 million shares at an average price of $110.27 per share. Of the 17 million shares, 16 million were repurchased in the open market using $1.8 billion of operating cash on hand. Additionally, the Company recovered $50 million of VE territory covered lossesover a pricing period in accordance with the Europe retrospective responsibility plan. The recovery has the same economic effect on earnings per share as repurchasing the Company's class A common stock, because it reduces the UK&I and Europe preferred stock conversion rates and consequently the as-converted class A common stock share count. See Note 2—U.S. and Europe Retrospective Responsibility Plans.
The following table presents share repurchases in the open market.(1)
(in millions, except per share data)Three Months Ended
December 31, 2017
Shares repurchased in the open market(2)
16
Average repurchase price per share(3)
$110.24
Total cost$1,778
(1)
Shares repurchased in the open market reflect repurchases settled during the three months ended December 31, 2017. These amounts include repurchases traded but not yet settled on or before September 30, 2017 and exclude repurchases traded but not yet settled on or before December 31, 2017.
(2)
All shares repurchased in the open market have been retired and constitute authorized but unissued shares.
(3)
Figures in the table may not recalculate exactly due to rounding. Average repurchase price per share is calculated based on unrounded numbers.
AsCompany’s current certificate of December 31, 2017, the Company's April 2017 share repurchase program had remaining authorized funds of $2.1 billion for share repurchase. All share repurchase programs authorized prior to April 2017 have been completed. In January 2018, the Company's board of directors authorized an additional $7.5 billion share repurchase program.
Under the terms of the Europe retrospective responsibility plan, the Company is entitled to recover VE territory covered losses through periodic adjustments to the class A common stock conversion rates applicable to the UK&I and Europe preferred stock. See Note 2—U.S. and Europe Retrospective Responsibility Plans.

14

VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)


incorporation.
The following table presents the reduction in the number of as-converted UK&Iseries B and EuropeC preferred stock after the Company recovered VE territory covered losses through conversion rate adjustments,adjustments:
Three Months Ended
December 31, 2022
Three Months Ended
December 31, 2021
Series BSeries CSeries BSeries C
(in millions, except per share data)
Reduction in equivalent number of class A common stock (1) (1)— (1)— (1)
Effective price per share(2)
$211.34 $211.34 $201.68 $201.68 
Recovery through conversion rate adjustment$7 $7 $26 $
(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.
19

VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)
Common stock repurchases. The following table presents share repurchases in the open market:
Three Months Ended
December 31,
20222021
(in millions, except per share data)
Shares repurchased in the open market(1)
16 19 
Average repurchase price per share(2)
$197.69 $210.32 
Total cost(2)
$3,115 $4,104 
(1)Shares repurchased in the open market reflect repurchases that settled during the three months ended December 31, 2017.2022 and 2021. All shares repurchased in the open market have been retired and constitute authorized but unissued shares.
(2)Figures in the table may not recalculate exactly due to rounding. Average repurchase price per share and total cost are calculated based on unrounded numbers.
 Three Months Ended
December 31, 2017
(in millions, except per share data)UK&I Preferred Stock Europe Preferred Stock
Reduction in equivalent number of shares of class A common stock(1)

 
Effective price per share(2)
$111.32
 $111.32
Recovery through conversion rate adjustment$31
 $19
In October 2022, the Company’s board of directors authorized a $12.0 billion share repurchase program. Previously, in December 2021, the Company’s board of directors authorized a $12.0 billion share repurchase program (December 2021 Program). These authorizations have no expiration date. As of December 31, 2022, the Company’s repurchase programs had remaining authorized funds of $14.1 billion. All share repurchase programs authorized prior to the December 2021 Program have been completed.
(1)
The reduction in equivalent number of shares of class A common stock was less than one million shares for both series of preferred stock.
(2)
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 certificates of designations for its series B and C convertible participating preferred stock.
Dividends. InThe Company declared and paid dividends of $945 million and $809 million during the three months ended December 31, 2022 and 2021, respectively. On January 2018,24, 2023, the Company’s board of directors declared a quarterly cash dividend of $0.21$0.45 per share of class A common stock (determined in the case of class B and C common stock and UK&Iseries A, B and EuropeC preferred stock on an as-converted basis). The cash dividend, which will be paid on March 6, 2018,1, 2023, to all holders of record of the Company's common and preferred stock as of February 16, 2018. The Company declared and paid $458 million in dividends to holders of the Company's common stock during the three months ended December 31, 2017.10, 2023.
Note 8—9—Earnings Per Share
Basic earnings per share is computed by dividing net income available to each class by the weighted-average number of shares of common stock outstanding and participating securities during the period. Net income is allocated to each class of common stock and participating securities based on its proportional ownership on an as-converted basis. The weighted-average number of shares of each class of common stock outstanding reflects changes in ownership over the periods presented. See Note 7—Stockholders' Equity.
Diluted earnings per share is computed by dividing net income available by the weighted-average number of shares of common stock outstanding, participating securities and, if dilutive, potential class A common stock equivalent shares outstanding during the period. Dilutive class A common stock equivalents may consist of: (1) shares of class A common stock issuable upon the conversion of UK&I and Europe preferred stock and class B and C common stock based on the conversion rates in effect through the period, and (2) incremental shares of class A common stock calculated by applying the treasury stock method to the assumed exercise of employee stock options, the assumed purchase of stock under the Employee Stock Purchase Plan and the assumed vesting of unearned performance shares.
The following table presents earnings per share for the three months ended December 31, 2017.(1)2022:
 Basic Earnings Per ShareDiluted Earnings Per Share
Income
Allocation
(A)(1)
Weighted-
Average
Shares
Outstanding (B)
Earnings per
Share =
(A)/(B)(2)
Income
Allocation
(A)(1)
Weighted-
Average
Shares
Outstanding (B)
 
Earnings per
Share =
(A)/(B)(2)
(in millions, except per share data)
Class A common stock$3,243 1,629 $1.99 $4,179 2,102 (3)$1.99 
Class B common stock784 245 $3.19 $784 245 $3.19 
Class C common stock78 10 $7.96 $78 10 $7.95 
Participating securities74 Not presentedNot presented$74 Not presentedNot presented
Net income$4,179 
20

 Basic Earnings Per Share  Diluted Earnings Per Share
 (in millions, except per share data)
 
Income
Allocation
(A)(2)
 
Weighted-
Average
Shares
Outstanding (B)
 
Earnings per
Share =
(A)/(B)
  
Income
Allocation
(A)(2)
 
Weighted-
Average
Shares
Outstanding (B)
 
Earnings per
Share =
(A)/(B)
Class A common stock$1,945
 1,811
 $1.07
  $2,522
 2,353
(3) 
$1.07
Class B common stock435
 245
 $1.77
  $434
 245
 $1.77
Class C common stock54
 13
 $4.30
  $54
 13
 $4.29
Participating securities(4)
88
 Not presented
 Not presented
  $87
 Not presented
 Not presented
Net income$2,522
           
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

15

VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)


The following table presents earnings per share for the three months ended December 31, 2016.(1)2021:
 Basic Earnings Per ShareDiluted Earnings Per Share
Income
Allocation
(A)(1)
Weighted-
Average
Shares
Outstanding (B)
Earnings per
Share =
(A)/(B)(2)
Income
Allocation
(A)(1)
Weighted-
Average
Shares
Outstanding (B)
 
Earnings per
Share =
(A)/(B)(2)
(in millions, except per share data)
Class A common stock$3,065 1,669 $1.84 $3,959 2,159 (3)$1.83 
Class B common stock732 245 $2.98 $731 245 $2.98 
Class C common stock74 10 $7.35 $74 10 $7.34 
Participating securities88 Not presentedNot presented$88 Not presentedNot presented
Net income$3,959 
(1)The weighted-average number of shares of as-converted class B common stock used in the income allocation was 394 million and 398 million for the three months ended December 31, 2022 and 2021, respectively. The weighted-average number of shares of as-converted class C common stock used in the income allocation was 39 million and 40 million for the three months ended December 31, 2022 and 2021, respectively. The weighted-average number of shares of preferred stock included within participating securities was 13 million and 7 million of as-converted series A preferred stock for the three months ended December 31, 2022 and 2021, respectively, 7 million and 16 million of as-converted series B preferred stock for the three months ended December 31, 2022 and 2021, respectively, and 11 million and 22 million of as-converted series C preferred stock for the three months ended December 31, 2022 and 2021, respectively.
(2)Figures in the table may not recalculate exactly due to rounding. Basic and diluted earnings per share are calculated based on unrounded numbers.
(3)Weighted-average diluted shares outstanding are calculated on an as-converted basis and include incremental common stock equivalents, as calculated under the treasury stock method. The common stock equivalents are not material for the three months ended December 31, 2022 and 2021.
 Basic Earnings Per Share  Diluted Earnings Per Share
 (in millions, except per share data)
 
Income
Allocation
(A)(2)
 
Weighted-
Average
Shares
Outstanding (B)
 
Earnings per
Share =
(A)/(B)
  
Income
Allocation
(A)(2)
 
Weighted-
Average
Shares
Outstanding (B)
 
Earnings per
Share =
(A)/(B)
Class A common stock$1,594
 1,860
 $0.86
  $2,070
 2,421
(3) 
$0.86
Class B common stock347
 245
 $1.41
  $346
 245
 $1.41
Class C common stock57
 17
 $3.43
  $57
 17
 $3.42
Participating securities(4)
72
 Not presented
 Not presented
  $72
 Not presented
 Not presented
Net income$2,070
           
(1)
Figures in the table may not recalculate exactly due to rounding. Earnings per share is calculated based on unrounded numbers.
(2)
Net income is allocated based on proportional ownership on an as-converted basis. The weighted-average number of shares of as-converted class B common stock used in the income allocation was 405 million for the three months ended December 31, 2017 and 2016. The weighted-average number of shares of as-converted class C common stock used in the income allocation was 51 million and 67 million for the three months ended December 31, 2017 and 2016, respectively. The weighted-average number of shares of preferred stock, included within participating securities, was 32 million and 35 million of as-converted UK&I preferred stock for the three months ended December 31, 2017 and 2016, respectively, and 44 million of as-converted Europe preferred stock for the three months ended December 31, 2017 and 2016.
(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 computation includes approximately 5 million common stock equivalents for the three months ended December 31, 2017 and 2016, because their effect would be dilutive. The computation excludes 2 million and 3 million of common stock equivalents for the three months ended December 31, 2017 and 2016, respectively, because their effect would have been anti-dilutive.
(4)
Participating securities include preferred stock outstanding and unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents, such as the Company's UK&I and Europe preferred stock, restricted stock awards, restricted stock units and earned performance-based shares. Participating securities' income is allocated based on the weighted-average number of shares of as-converted stock.
Note 9—10—Share-based Compensation
The Company grantedfollowing table presents the following equity awards granted to employees and non-employee directors under the 2007 Equity Incentive Compensation Plan (EIP) during the three months ended December 31, 2017:2022:
GrantedWeighted-Average Grant Date Fair ValueWeighted-Average Exercise Price
Non-qualified stock options785,254 $57.29 $210.80 
Restricted stock units2,998,777 $210.18 
Performance-based shares(1)
457,178 $216.08 
 Granted 
Weighted-Average
Grant Date Fair
Value
 
Weighted-Average
Exercise Price
Non-qualified stock options1,622,760
 $17.88
 $109.82
Restricted stock units ("RSUs")2,626,011
 $109.82
  
Performance-based shares(1)
641,498
 $120.11
  
(1)
(1)Represents the maximum number of performance-based shares which could be earned.
The Company’s non-qualified stock options and RSUs are equity awards with service-only conditions and are accordingly expensed on a straight-line basis over the vesting period. The Company's performance-based shares are equity awards with service, market and performance conditions that are accounted for using the graded-vesting method. The Company recorded share-based compensation cost of $68 million forwhich could be earned.
For the three months ended December 31, 2017, net2022 and 2021, the Company recorded share-based compensation cost related to the EIP of estimated forfeitures, which are adjusted as appropriate.

$170 million and $121 million, respectively.
16
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VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—STATEMENTS (UNAUDITED)—(Continued)


Note 10—11—Income Taxes
The effective income tax rates were 22% and 31% forFor the three months ended December 31, 20172022 and 2016,2021, the effective income tax rates were 16% and 19%, respectively. The difference in the effective tax rate forrates is primarily due to a $142 million tax benefit related to prior years recognized during the three months ended December 31, 2017 differs from the effective tax rate in the same prior-year period primarily2022 due to U.S.the reassessment of an uncertain tax reform legislation, commonly referred toposition as the Tax Cuts and Jobs Act (the "Tax Act”), enacted on December 22, 2017. The Tax Act transitions the U.S. tax system to a new territorial system and lowers the statutory federal corporate income tax rate from 35% to 21%.
The reduction of the statutory federal corporate tax rate to 21% became effective on January 1, 2018. In fiscal 2018, the Company’s statutory federal corporate rate is a blended rate of 24.5%, which will be reduced to 21% in fiscal 2019 and thereafter.
As a result of the reduction in the federal corporatenew information obtained during an ongoing tax rate, the Company remeasured its net deferred tax liabilities as of the enactment date of the Tax Act. The deferred tax remeasurement resulted in a one-time, non-cash tax benefit estimated to be approximately $1.1 billion, recorded in the three months ended December 31, 2017.
In transitioning to the new territorial tax system, the Tax Act requires the Company to include certain untaxed foreign earnings of non-U.S. subsidiaries in its fiscal 2018 taxable income. Such foreign earnings are subject to a one-time tax at 15.5% on the amount held in cash or cash equivalents, and at 8% on the remaining non-cash amount. The 15.5% and 8% tax, collectively referred to as the “transition tax”, was estimated to be $1.1 billion, and was recorded in the three months ended December 31, 2017. The Company intends to elect to pay the transition tax over a period of eight years as permitted by the Tax Act.
The above-mentioned accounting impacts of the deferred tax remeasurement and transition tax are provisional, based on currently available information and technical guidance on the interpretations of the new law. The Company continues to obtain and analyze additional information and guidance as they become available to complete the accounting for the tax impacts of the Tax Act. Additional information currently unavailable that is needed to complete the analysis includes, but is not limited to, foreign tax returns and foreign tax documentation for the computation of foreign tax credits, the final determination of the untaxed foreign earnings subject to the transition tax, and the final determination of the net deferred tax liabilities subject to remeasurement. The provisional accounting impacts may change in future reporting periods until the accounting analysis is finalized, which will occur no later than the first quarter of fiscal 2019, as permitted by Staff Accounting Bulletin 118.
The Tax Act also introduces several tax provisions, including:
Tax on global intangible low-tax income, which, in general, is determined annually based on the Company’s aggregate foreign subsidiaries’ income in excess of certain qualified business asset investment return. This provision is effective for the Company on October 1, 2018. The Company needs additional information to complete its analysis on whether to adopt an accounting policy to account for the tax effects of global intangible low-tax income in the period that it is subject to such tax, or to provide deferred taxes for book and tax basis differences that, upon reversal, may be subject to such tax. Hence, the Company has not recorded any tax on global intangible low-tax income in the three months ended December 31, 2017. The Company will make an accounting policy election no later than the first quarter of fiscal 2019.
Base erosion and anti-abuse tax, which, in general, functions like a minimum tax that partially disallows deductions for certain related party transactions. This new minimum tax is determined on a year-by-year basis, and this provision is effective for the Company on October 1, 2018. Hence, no base erosion anti-abuse tax was recorded in the three months ended December 31, 2017.
Deduction for foreign-derived intangible income, which, in general, allows a deduction of certain intangible income derived from serving foreign markets. This provision is effective for the Company on October 1, 2018. Hence, the Company has not recorded the impact of this provision in the three months ended December 31, 2017.

17

Table of Contents
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)


Other new tax provisions, which disallow certain deductions related to entertainment expenses, fringe benefits provided to employees, executive compensation, and fines or penalties or similar payments to governments. The Company has recorded provisional amounts for the tax effects of these new provisions in the three months ended December 31, 2017, based on information currently available. The provisional amounts may change in future reporting periods when additional information is obtained and analyzed, which will occur no later than the first quarter of fiscal 2019.examination.
During the three months ended December 31, 2017,2022, the Company'sCompany’s gross unrecognized tax benefits increased by $44 million. The Company'sand net unrecognized tax benefits that, if recognized, would favorably impact the effective tax rate increaseddecreased by $38 million.$108 million and $149 million, respectively. The increasedecrease in unrecognized tax benefits is primarily related to the reassessment mentioned above, partially offset by an increase in gross timing differences as well as various tax positions across several jurisdictions. During the three months ended December 31, 2017 and 2016, there were no significant changes in interest and penalties related to uncertain tax positions.
The Company’s tax filings are subject to examination by the U.S. federal, state and foreign taxing authorities. The timing and outcome of the final resolutions of the various ongoing income tax examinations are highly uncertain. It is not reasonably possible to estimate the increase or decrease in unrecognized tax benefits within the next twelve months.
Note 11—12—Legal Matters
The Company is party to various legal and regulatory proceedings. Some of these proceedings involve complex claims that are subject to substantial uncertainties and unascertainable damages. Accordingly, except as disclosed,For those proceedings where a loss is determined to be only reasonably possible or probable but not estimable, the Company has not established reserves or rangesdisclosed the nature of possible loss relatedthe claim. Additionally, unless otherwise disclosed below with respect to these proceedings, as at this time in the proceedings,Company cannot provide an estimate of the matters do not relate to a probablepossible loss and/or the amount or range of losses are not reasonably estimable.loss. Although the Company believes that it has strong defenses for the litigation and regulatory proceedings described below, it could, in the future, incur judgments or fines or enter into settlements of claims that could have a material adverse effect on the Company'sCompany’s financial position, results of operations or cash flows. From time to time, the Company may engage in settlement discussions or mediations with respect to one or more of its outstanding litigation matters, either on its own behalf or collectively with other parties.
The litigation accrual is an estimate and is based on management’s understanding of its litigation profile, the specifics of each case, advice of counsel to the extent appropriate and management’s best estimate of incurred loss as of the balance sheet date.
The following table summarizes the activity related to accrued litigation:
Three Months Ended Three Months Ended
December 31,
December 31, 2017 December 31, 2016 20222021
(in millions) (in millions)
Balance at beginning of period$982
 $981
Balance at beginning of period$1,456 $983 
Provision for uncovered legal matters
 15
Provision for uncovered legal matters 
Accrual of VE territory covered litigation
 86
Payments on legal matters(152) (88)
Provision for covered legal mattersProvision for covered legal matters347 146 
Payments for legal mattersPayments for legal matters(101)(103)
Balance at end of period$830
 $994
Balance at end of period$1,702 $1,027 
Accrual Summary—U.S. Covered Litigation
Visa Inc., Visa U.S.A. and Visa International are parties to certain legal proceedings that are covered by the U.S. retrospective responsibility plan, which the Company refers to as the U.S. covered litigation. See Note 2—U.S. and Europe Retrospective Responsibility Plans. An accrual for the U.S. covered litigation and a charge to the litigation provision are recorded when a loss is deemed to be probable and reasonably estimable. In making this determination, the Company evaluates available information, including but not limited to actions taken by the Company’s litigation committee. The total accrual related to the U.S. covered litigation could be either higher or lower than the escrow account balance.

See further discussion below under U.S. Covered Litigation and Note 4—U.S. and Europe Retrospective Responsibility Plans.
18
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VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—STATEMENTS (UNAUDITED)—(Continued)


The following table summarizes the accrual activity related to U.S. covered litigation:
 Three Months Ended
December 31,
 20222021
 (in millions)
Balance at beginning of period$1,441 $881 
Provision for interchange multidistrict litigation341 145 
Payments for U.S. covered litigation(101)— 
Balance at end of period$1,681 $1,026 
 Three Months Ended
 December 31, 2017 December 31, 2016
 (in millions)
Balance at beginning of period$978
 $978
Payments on U.S. covered litigation(150) 
Balance at end of period$828
 $978

During the three months ended December 31, 2022, the Company recorded an additional accrual of $341 million and deposited $350 million into the U.S. litigation escrow account to address claims associated with the interchange multidistrict litigation. The U.S. covered litigation accrual balance is consistent with the Company’s best estimate of its share of a probable and reasonably estimable loss with respect to U.S. covered litigation. While this estimate is consistent with the Company’s view of the current status of the litigation, the probable and reasonably estimable loss or range of such loss could materially vary based on developments in the litigation. The Company will continue to consider and reevaluate this estimate in light of the substantial uncertainties with respect to the litigation. The Company is unable to estimate a potential loss or range of loss, if any, at trial if negotiated resolutions cannot be reached.
Accrual Summary—VE Territory Covered Litigation
Visa Inc., Visa International and Visa Europe are parties to certain legal proceedings that are covered by the Europe retrospective responsibility plan. Unlike the U.S. retrospective responsibility plan, the Europe retrospective responsibility plan does not have an escrow account that is used to fund settlements or judgments. The Company is entitled to recover VE territory covered losses through periodic adjustments to the conversion rates applicable to the UK&I preferred stockseries B and EuropeC preferred stock. An accrual for the VE territory covered losses and a reduction to stockholders'stockholders’ equity will be recorded when the loss is deemed to be probable and reasonably estimable. See further discussion below under VE Territory Covered Litigation and Note 2—4—U.S. and Europe Retrospective Responsibility Plans.
The following table summarizes the accrual activity related to VE territory covered litigation:
 Three Months Ended
December 31,
 20222021
(in millions)
Balance at beginning of period$11 $102 
Provision for VE territory covered litigation6 
Payments for VE territory covered litigation (102)
Balance at end of period$17 $
 Three Months Ended
 December 31, 2017 December 31, 2016
 (in millions)
Balance at beginning of period$1
 $2
Accrual for VE territory covered litigation
 86
Payments on VE territory covered litigation(1) (88)
Balance at end of period$
 $
U.S. Covered Litigation
Interchange Multidistrict Litigation (MDL) - Individual Merchant Actions
A number of individual merchant actions previously filed have been settled, and remain settled. In addition, following the automatic termination of the settlement agreement with Wal-Mart Stores Inc., Visa and Wal-Mart Stores Inc. entered into a new, unconditional settlement agreement on October 31, 2017. Consequently, as of the filing date, Visa has reached settlement agreementssettlements with individuala number of merchants representing approximately 51%62% of the Visa-branded payment card sales volume of merchants who opted out of the 2012Amended Settlement Agreement.Agreement with the Damages Class plaintiffs.
23

Table of Contents
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)
VE Territory Covered Litigation
UKEurope Merchant Litigation
Since July 2013, in excess of 300proceedings have been commenced by more than 900 Merchants (the capitalized term "Merchant,"“Merchant” when used in this section, means a merchantMerchant together with subsidiary/affiliate companies that are party to the same claim) have commenced proceedings against Visa Europe, Visa Inc. and other Visa Internationalsubsidiaries in the UK and other countries primarily relating to interchange rates in Europe. They seek damages for alleged anti-competitive conductEurope and in relationsome cases relating to one or more of the following types of interchange fees for creditcharged by Visa and debit card transactions: UK domestic, Irish domestic, other European domestic, intra-European Economic Area and/or other inter-regional.certain Visa rules. As of the filing date, Visa Europe, Visa Inc. and Visa International havehas settled the claims asserted by over 75150 Merchants, leaving more than 200and there are approximately 700 Merchants with outstanding claims.

19

Table of Contents
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)


In November 2016, a trial commenced relating to claims filed by a number of Merchants. All of these Merchants except one settled before the trial concluded in March 2017. On November 30, 2017, the court found entirely in Visa’s favor and entered judgment dismissing the remaining claim. An appeal has been lodged, and the Court of Appeal listed the matter for hearing in April 2018. A further judgment on exemption issues is expected to be released in early 2018, which will not change the overall finding on liability set out in the November 30, 2017 judgment.
In addition, over 30 additional Merchants have threatened to commence similar proceedings. Standstill agreements have been entered into with respect to some of those Merchants' claims. Whilethreatened Merchant claims, several of which have been settled.
Other Litigation
EMV Chip Liability Shift
On November 30, 2022, Visa, jointly with other defendants, served a motion for summary judgment regarding the amount of interchange being challenged could be substantial, these claims have not yet been filed and their full scope is not yet known. The Company has learned that several additional European entities have indicated that they may also bring similar claims and the Company anticipates additional claims in the future.amended complaint and a motion to decertify the class.
OtherU.S. 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. debit and competition with other payment methods and networks. Visa is cooperating with the Division in connection with the investigation.
Foreign Currency Exchange Rate Litigation
Canadian Competition Proceedings
Merchant Litigation. The court in Quebec held a class certification hearing in November 2017 and reserved decision.
Black Card
On December 28, 2017, Black Card LLC ("Black Card")21, 2022, plaintiffs filed a lawsuitthird amended complaint asserting the same claims as asserted in the prior complaints.

European Commission Client Incentive Agreements Investigation

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

Consumer Interchange Litigation

On December 30, 2022, a putative class action was filed in California state court against Visa, Inc., Visa U.S.A. Inc.,Mastercard, and certain Visa member financial institutions on behalf of all Visa and Mastercard cardholders in California who made a purchase using a Visa-branded or Mastercard-branded payment card in California from January 1, 2004. Plaintiffs primarily allege a conspiracy to fix interchange fees and seek injunctive relief, attorneys’ fees and damages as direct and indirect purchasers based on alleged violations of California law. On January 11, 2023, plaintiffs filed an amended complaint asserting the same claims as asserted in the U.S. District Court for the Western Districtprior complaint.




24

Table of Wisconsin. The complaint alleges that defendants conspired to impede Black Card's business in violation of Section 1 of the Sherman Act and fraudulently concealed their conduct. Black Card seeks treble damages, post-judgment interest, and attorneys' fees.
This action follows a lawsuit filed by Black Card in the U.S. District Court for the District of Wyoming in February 2015 relating to a contractual dispute. The District Court in Wyoming granted Visa's motions for summary judgment and the matter was dismissed. Black Card appealed this decision to the U.S. Court of Appeals for the Tenth Circuit on May 10, 2017.

ITEM 2.Management'sManagement’s Discussion and Analysis of Financial Condition and Results of Operations
This management’s discussion and analysis provides a review of the results of operations, financial condition and the liquidity and capital resources of Visa Inc. and its subsidiaries (“Visa,” “we,” "us," “our”(Visa, we, us, our or the “Company”)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 elsewhere 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 reopening of borders and resumption of international travel; prospects, developments, strategies and growth of our business; integration of Visa Europe, including the migration of European activity to VisaNet and anticipated benefits for our European clients; 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 "believes," "estimates," "expects," "intends," "may," "projects,"“anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “projects,” “could," "should," "will," "continue"” “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, 20172022, and ourany 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.

25

Overview
Visa is a global payments technology company that enables fast, securefacilitates global commerce and reliable electronic paymentsmoney movement across more than 200 countries and territories. We facilitate global commerce through the transfer of value and informationterritories among a global networkset of consumers, merchants, financial institutions businesses, strategic partners and government entities. Our advancedentities through innovative technologies. We provide transaction processing network, VisaNet, enablesservices (primarily authorization, clearing and settlement of payment transactions and allows ussettlement) to provide 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
December 31,
20222021
%
Change(1)
(in millions, except percentages and per share data)
Net revenues$7,936 $7,059 12 %
Operating expenses$2,846 $2,283 25 %
Net income$4,179 $3,959 %
Diluted earnings per share$1.99 $1.83 %
Non-GAAP operating expenses(2)
$2,439 $2,115 15 %
Non-GAAP net income(2)
$4,581 $3,901 17 %
Non-GAAP diluted earnings per share(2)
$2.18 $1.81 21 %
(1)Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.
(2)For a wide rangefull reconciliation of products, platformsour GAAP to non-GAAP financial results, see tables in Non-GAAP financial results below.
Russia & Ukraine. During the quarter ended March 31, 2022, economic sanctions were imposed on Russia by the U.S., European Union, United Kingdom and value-added services.
Overall economic conditions. Our business is affected by overall economic conditionsother jurisdictions and consumer spending. Our business performance duringauthorities, 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 December 31, 2017 reflects continued uneven economic growth around the world.2021, total net revenues from Russia, including revenues driven by domestic as well as cross-border activities, was approximately 4% of our consolidated net revenues.
U.S. Tax Reform Legislation. On December 22, 2017, the U.S. government enacted comprehensive tax reform legislation commonly referred to as the Tax Cuts and Jobs Act (the "Tax Act"). The Tax Act transitions the U.S. tax system to a new territorial system and lowers the statutory federal corporate income tax rate. As a resultcontinuing effects of the reductionwar 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 federal corporate income tax rate, we remeasured our net deferred tax liabilities asyear ended September 30, 2022. We will continue to evaluate the nature and extent of the enactment date andimpact to our business.
Highlights for the remeasurement resulted in a one-time, non-cash tax benefit estimated to be approximately $1.1 billion, recorded infirst quarter of fiscal 2023. For the three months ended December 31, 2017. In transitioning to the new territorial system, the Tax Act requires us to include certain untaxed foreign earnings of non-U.S. subsidiaries in our fiscal 2018 taxable income. This tax, referred to as the "transition tax", was estimated to be $1.1 billion and recorded in the three months ended December 31, 2017. See Note 10—Income Taxes to our unaudited consolidated financial statements.
Financial highlights. Ourfinancial results for the three months ended December 31, 2017 reflect the impact of certain significant items that we believe are not indicative of our operating performance in these or future periods, as they were either non-recurring or had no cash impact. There were no comparable adjustments recorded for the three months ended December 31, 2016. Our as-reported U.S. GAAP and adjusted non-GAAP2022, net income and diluted earnings per share for these periods are as follows:
 Three Months Ended December 31,  
(in millions, except percentages and per share data)2017 2016 
%
Change(1)
Net income, as reported$2,522
 $2,070
 22%
Diluted earnings per share, as reported$1.07
 $0.86
 25%
Net income, as adjusted(2)
$2,536
 $2,070
 23%
Diluted earnings per share, as adjusted(2)
$1.08
 $0.86
 26%
(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 adjusted financial results, see tables in Adjusted financial results below.
We recorded net operating revenues of $4.9 billion for the three months ended December 31, 2017, an increase of 9%increased 12% over the prior-year comparable period, reflecting continuedprimarily due to the growth in nominal paymentscross-border volume, processed transactions and nominal cross-border volume. The effect of exchange rate movements in the three months ended December 31, 2017, aspayments volume, partially mitigatedoffset by our hedging program, resulted in an approximately one percentage point positive impact to our net operating revenue growth.
Total operating expenses for the three months ended December 31, 2017 were $1.5 billion, an increase of 13%, over the prior-year comparable period. The increase in the period was primarily due to increases in personnel expenses, general and administrative expenses, network and processing expenses and professional fees as we continue to invest to support growth.

Adjusted financial results. Our financial results for the three months ended December 31, 2017 reflect the impact of certain significant items that we do not believe are indicative of our ongoing operating performance in this period or future periods, as they were either non-recurring or had no cash impact. As such, we believe the presentation of adjusted financial results excluding the following items provides a clearer understanding of our operating performance for the periods presented. There were no comparable adjustments recorded for the three months ended December 31, 2016.
Remeasurement of deferred tax balances. higher client incentives. During the three months ended December 31, 2017, in connection with the Tax Act's reduction of the corporate income tax2022, exchange rate we remeasuredmovements negatively impacted our net deferred tax liabilities asrevenues growth by approximately three percentage points.
For the three months ended December 31, 2022, GAAP operating expenses increased 25% over the prior-year comparable period primarily due to higher expenses related to personnel and litigation provision. See Results of the enactment date, resulting in the recognition of a non-recurring, non-cash income tax benefit estimated to be approximately $1.1 billion.
Transition tax on foreign earnings. Operations—Operating Expenses below for further discussion. During the three months ended December 31, 2017, in connection with the Tax Act's requirement that we include certain untaxed foreign earnings of non-U.S. subsidiaries in2022, exchange rate movements positively impacted our fiscal 2018 taxable income, we recorded a one-time transition tax estimated to beoperating expense growth by approximately $1.1 billion.
one-and-a-half percentage points.
See Note 10—Income Taxes to our unaudited consolidated financial statements.
Adjusted financial results are non-GAAP financial measures and should not be relied upon as substitutes for measures calculated in accordance with U.S. GAAP. The following table reconciles our as-reported financial measures calculated in accordance with U.S. GAAP, to our respective non-GAAP adjusted financial measures forFor the three months ended December 31, 2017. There were no2022, non-GAAP operating expenses increased 15% over the prior year comparable adjustments recorded for the three months ended December 31, 2016.period primarily due to higher personnel and general and administrative expenses.
26

 Three Months Ended
December 31, 2017
(in millions, except per share data)Income Tax Provision Net Income 
Diluted Earnings Per Share(1)
As reported$717
 $2,522
 $1.07
Remeasurement of deferred tax balances1,133
 (1,133) (0.48)
Transition tax on foreign earnings(1,147) 1,147
 0.49
As adjusted$703
 $2,536
 $1.08
(1)
Figures in the table may not recalculate exactly due to rounding. Diluted earnings per share and its respective total are calculated based on unrounded numbers.
Common stock repurchases.Interchange multidistrict litigation. During the three months ended December 31, 2017,2022, we recorded an additional accrual of $341 million to address claims associated with the interchange multidistrict litigation. We also made deposits of $350 million into the U.S. 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. Previously, in December 2021, our board of directors authorized a $12.0 billion share repurchase program. During the three months ended December 31, 2022, we repurchased 16 million shares of our class A common stock in the open market using $1.8 billion of cash on hand.for $3.1 billion. As of December 31, 2017, we2022, our repurchase programs had remaining authorized funds of $2.1 billion for share repurchase. In January 2018, our board of directors authorized an additional $7.5 billion share repurchase program.$14.1 billion. See Note 7—Stockholders'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.
Nominal paymentsGains 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 thecompanies that we invest inand 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 three months ended December 31, 2022 and 2021, we recorded an additional accrual to address claims associated with the interchange multidistrict litigation of $341 million and $145 million, respectively, and related tax benefit of $76 million and $32 million, respectively, determined by applying applicable tax rates. Under the U.S. retrospective responsibility plan, we recover the monetary liabilities related to the U.S. covered litigation through a downward adjustment to the 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.
27

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 December 31, 2022
Operating ExpensesNon-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$2,846 $(113)$798 16.0 %$4,179 $1.99 
(Gains) losses on equity investments, net— 106 24 82 0.04 
Amortization of acquired intangible assets(43)— 34 0.02 
Acquisition-related costs(23)— 21 0.01 
Litigation provision(341)— 76 265 0.13 
Non-GAAP$2,439 $(7)$909 16.5 %$4,581 $2.18 

Three Months Ended December 31, 2021
Operating ExpensesNon-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$2,283 $121 $938 19.1 %$3,959 $1.83 
(Gains) losses on equity investments, net— (231)(42)(189)(0.09)
Amortization of acquired intangible assets(13)— 10 — 
Acquisition-related costs(10)— — 
Litigation provision(145)— 32 113 0.05 
Non-GAAP$2,115 $(110)$933 19.3 %$3,901 $1.81 
(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.
Payments volume and transaction counts.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.
Paymentsvolume 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 over the prior year posted high single-digit growthis denominated in the United States, driven mainlyU.S. dollars and is calculated each quarter by consumer credit. Growth on a constant-dollar basis, which excludes the impact ofapplying an established U.S. dollar/foreign currency exchange rate movementsfor 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 our international payments volume, was not significantly different from growth on a nominal-dollar basis for the three months ended September 30, 2017(1). Growth in processed transactions reflects the ongoing worldwide shift to electronic payments.Visa’s networks.
28

The following table presents nominal payments and cash volume.(2)volume:
U.S.InternationalVisa Inc.
Three Months Ended September 30,(1)
Three Months Ended September 30,(1)
Three Months Ended September 30,(1)
20222021
% Change(2)
20222021
% Change(2)
20222021
% Change(2)
(in billions, except percentages)
Nominal payments volume
Consumer credit$551 $480 15 %$684 $652 %$1,236 $1,132 %
Consumer debit(3)
682 640 %635 692 (8 %)1,317 1,332 (1 %)
Commercial(4)
247 206 20 %130 118 11 %377 323 17 %
Total nominal payments volume(2)
$1,480 $1,326 12 %$1,449 $1,461 (1 %)$2,929 $2,787 %
Cash volume(5)
155 179 (13 %)451 496 (9 %)606 675 (10 %)
Total nominal volume(2),(6)
$1,635 $1,505 %$1,900 $1,958 (3 %)$3,535 $3,462 %
 United States 
International(3)
 
Visa Inc.(3)
 
Three Months Ended September 30,(1)
 
Three Months Ended September 30,(1)
 
Three Months Ended September 30,(1)
 2017 2016 %
Change
 2017 2016 %
Change
 2017 2016 %
Change
 (in billions, except percentages)
Nominal payments volume                 
Consumer credit$348
 $315
 10% $589
 $551
 7% $937
 $866
 8%
Consumer debit(4)
354
 328
 8% 419
 359
 17% 773
 686
 13%
Commercial(5)
134
 125
 8% 86
 75
 15% 220
 200
 10%
Total nominal payments volume$836
 $768
 9% $1,094
 $985
 11% $1,930
 $1,752
 10%
Cash volume142
 135
 5% 605
 595
 2% 747
 731
 2%
Total nominal volume(6)
$978
 $903
 8% $1,700
 $1,580
 8% $2,677
 $2,483
 8%
The following table presents the change in nominal and constant payments and cash volume:
InternationalVisa Inc.
 
Three Months
Ended September 30,
2022 vs. 2021(1),(2)
Three Months
Ended September 30,
2022 vs. 2021(1),(2)
 Nominal
Constant(7)
Nominal
Constant(7)
Payments volume growth
Consumer credit growth%16 %%15 %
Consumer debit growth(3)
(8 %)%(1 %)%
Commercial growth(4)
11 %25 %17 %22 %
Total payments volume growth(1 %)%%10 %
Cash volume growth(5)
(9 %)(2 %)(10 %)(5 %)
Total volume growth(3 %)%%%
(1)Service revenues in a given quarter are assessed based on nominal payments volume growth.(2)in the prior quarter. Therefore, service revenues reported for the three months ended December 31, 2022 and 2021, respectively, were based on nominal payments volume reported by our financial institution clients for the three months ended September 30, 2022 and 2021, respectively. On occasion, previously presented volume information may be updated. 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.
 
International(3)
 
Visa Inc.(3)
 
Three Months
Ended September 30,
2017 vs. 2016
(1)
 
Three Months
Ended September 30,
2017 vs. 2016
(1)
 Nominal 
Constant(7)
 Nominal 
Constant(7)
Payments volume growth       
Consumer credit growth7% 7% 8% 8%
Consumer debit growth(5)
17% 14% 13% 11%
Commercial growth(6)
15% 15% 10% 10%
Total payments volume growth11% 10% 10% 10%
Cash volume growth2% 0% 2% 1%
Total volume growth8% 7% 8% 7%
(3)Includes consumer prepaid volume and Interlink volume.

(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 months ended December 31, 2017 and 2016 were based on nominal payments volume reported by our financial institution clients for the three months ended September 30, 2017 and 2016, respectively.
(2)
Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.
(3)
As a result of European Union Interchange Fee regulation changes, effective with the quarter ended December 31, 2016, Europe co-badged payments volume is no longer included in reported volume. For comparative purposes, international volume for the three months ended September 30, 2016 was adjusted to exclude co-badged payments volume. The associated growth rates for the three months ended September 30, 2017 were calculated using these adjusted amounts.
(4)
Includes consumer prepaid volume and Interlink volume.
(5)
Includes large, middle and small business credit and debit, as well as commercial prepaid volume.
(6)
Total nominal volume is the sum of total nominal payments volume and cash volume. Total nominal payments volume is the total monetary value of transactions for goods and services that are purchased on cards carrying the Visa, Visa Electron, Interlink and V PAY brands. Cash volume generally consists of cash access transactions, balance access transactions, balance transfers and convenience checks. Total nominal volume is provided by our financial institution clients, subject to review by Visa. On occasion, previously presented volume information may be updated. Prior-period updates are not material.
(7)
Growth on a constant-dollar basis excludes the impact of foreign currency fluctuations against the U.S. dollar.

(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 providespresents the number of transactions involving Visa, Visa Electron, Interlink, V PAY and PLUS cards processed transactions:
 Three Months Ended
December 31,
20222021
%
Change(1)
(in millions, except percentages)
Visa processed transactions52,512 47,558 10 %
(1)Figures in the table may not recalculate exactly due to rounding. Percentage change is calculated based on Visa's networks during the periods presented.(1)unrounded numbers. On occasion, previously presented information may be updated. Prior period updates are not material.
29
 Three Months Ended December 31,
2017 2016 %
Change
(in millions, except percentages)
Visa processed transactions30,508
 27,329
 12%
Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.
Results of Operations
OperatingNet Revenues
The following table sets forthpresents our operatingnet revenues earned in the U.S. and internationally.internationally:
 Three Months Ended
December 31,
 20222021
%
Change(1)
 (in millions, except percentages)
U.S.$3,567 $3,178 12 %
International4,369 3,881 13 %
Net revenues$7,936 $7,059 12 %
 Three Months Ended
December 31,
 2017 vs. 2016
 2017 2016 $
Change
 
%
Change(1)
 (in millions, except percentages)
U.S.$2,265
 $2,121
 $144
 7%
International2,597
 2,340
 257
 11%
Net operating revenues$4,862
 $4,461
 $401
 9%
(1)
(1)Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.
The increase in operatingthe table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.
Net revenues reflectsincreased primarily due to the continued growth in nominal paymentscross-border volume, processed transactions and nominal cross-border volume.payments volume, partially offset by higher client incentives.
Our operatingnet revenues primarily service revenues, international transaction revenues and client incentives, 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. The effect of exchange rate movements inDuring the three months ended December 31, 2017, as partially mitigated by our hedging program, resulted in an approximately one percentage point positive impact to2022, exchange rate movements negatively impacted our net operating revenue growth.revenues growth by approximately three percentage points.
The following table sets forthpresents the components of our net operating revenues.revenues:
 Three Months Ended
December 31,
 20222021
%
Change(1)
 (in millions, except percentages)
Service revenues$3,511 $3,193 10 %
Data processing revenues3,827 3,614 %
International transaction revenues2,797 2,174 29 %
Other revenues587 449 31 %
Client incentives(2,786)(2,371)18 %
Net revenues$7,936 $7,059 12 %
 Three Months Ended
December 31,
 2017 vs. 2016
 2017 2016 $
Change
 
%
Change(1)
 (in millions, except percentages)
Service revenues$2,146
 $1,918
 $228
 12%
Data processing revenues2,147
 1,892
 255
 13%
International transaction revenues1,666
 1,489
 177
 12%
Other revenues229
 203
 26
 13%
Client incentives(1,326) (1,041) (285) 27%
Net operating revenues$4,862
 $4,461
 $401
 9%
(1)Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.
(1)
Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.
Service revenues increased during the three-month comparable period primarily due to 10%5% growth in nominal payments volume.
volume, despite the impact of our suspension of operations in Russia. Service revenues also increased due to business mix, select pricing modifications and card benefits.
Data processing revenues increased mainlyprimarily due to overall growth in processed transactions of 12% during the three-month comparable period.
10%, partially offset by our suspension of operations in Russia.

International transaction revenues increased primarily due to growth in nominal cross-border volume growthvolumes of 14% during the three-month comparable period.22%, excluding transactions within Europe. International transaction revenue growth was partially offset by lowerrevenues also increased due to volatility inof a broad range of currencies.
currencies and select pricing modifications.
Other revenues increased primarily due tovalue added services revenues tied to marketing and consulting services, acquisition-related revenues and select pricing modifications.
Client incentives increased during the three-month comparable period mainlyprimarily due to incentives recognized on long-term customer contracts that were initiated or renewed after the first quarter of fiscal 2017 and overall growth in global 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.
30

Operating Expenses
The following table sets forthpresents the components of our total operating expenses.expenses:
 Three Months Ended
December 31,
20222021
%
Change(1)
 (in millions, except percentages)
Personnel$1,337 $1,125 19 %
Marketing332 280 18 %
Network and processing178 190 (6 %)
Professional fees109 100 %
Depreciation and amortization227 198 15 %
General and administrative322 242 33 %
Litigation provision341 148 130 %
Total operating expenses$2,846 $2,283 25 %
 Three Months Ended
December 31,
 2017 vs. 2016
 2017 2016 
$
Change
 
%
Change(1)
 (in millions, except percentages)
Personnel$679
 $571
 $108
 19 %
Marketing223
 218
 5
 3 %
Network and processing160
 145
 15
 10 %
Professional fees92
 80
 12
 14 %
Depreciation and amortization145
 146
 (1) (1)%
General and administrative236
 186
 50
 27 %
Litigation provision
 15
 (15) (100)%
Total operating expenses$1,535
 $1,361
 $174
 13 %
(1)Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.

(1)
Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.
Personnel expensesincreased primarily due to an increase in headcount,higher number of employees and compensation, reflecting our strategy to invest forin future growth.
growth, including acquisitions.
Marketing expenses increased primarily due to increased spending in various campaigns, including the FIFA World Cup 2022TM and client marketing.
Network and processing expensesincreased mainly 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.
Professional fees Depreciation and amortization expensesincreased primarily due to consulting feesadditional depreciation and amortization from our acquisitions and on-going investments.
General and administrative expenses increased primarily due to an increase in travel expenses, unfavorable foreign currency fluctuations, and higher usage of travel related card benefits.
Litigation provision increased primarily due to an increase in accrual related to technology and other corporate projects.
the U.S. covered litigation. See Note 12—Legal Matters to our unaudited consolidated financial statements.
General and administrativeexpenses increased mainly due to increases in product enhancements and travel activities in support of our business growth, as well as higher indirect taxes.
Non-operating Income (Expense)
The following table sets forthpresents the components of our non-operating income (expense).:
 Three Months Ended
December 31,
20222021
%
Change(1)
 (in millions, except percentages)
Interest expense$(137)$(134)%
Investment income (expense) and other24 255 (91 %)
Total non-operating income (expense)$(113)$121 (194 %)
 Three Months Ended
December 31,
 2017 vs. 2016
 2017 2016 
$
Change
 
%
Change(1)
 (in millions, except percentages)
Interest expense$(154) $(140) $(14) 10 %
Other66
 19
 47
 NM
Total non-operating expense$(88) $(121) $33
 (27)%
(1)Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.
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 primarily due to lower income from derivative instruments and higher interest expense related to the issuance of debt in fiscal 2022, partially offset by a discrete tax benefit recognized during the three months ended December 31, 20172022.
Investment income (expense) and other decreased primarily due to the issuance of $2.5 billion fixed-rate senior notes in September 2017. See Note 4—Debt tolosses on our unaudited consolidated financial statements.

Other non-operating income increased in the three months ended December 31, 2017 due to a gain on the sale of an investment andequity investments, partially offset by higher interest income on our cash and investments.
31

Effective Income Tax Rate
The following table presents our effective income tax rates:
 Three Months Ended
December 31,
 20222021
Effective income tax rate16 %19 %
The difference in the effective tax rates were 22% and 31% foris primarily due to a $142 million tax benefit related to prior years recognized during the three months ended December 31, 2017 and 2016, respectively. The effective tax rate for the three months ended December 31, 2017 differs from the effective tax rate in the same prior-year period primarily2022 due to the Tax Act. The Tax Act transitions the U.S.reassessment of an uncertain tax system to a new territorial system and lowers the statutory federal corporate income tax rate from 35% to 21%.
The reduction of the statutory federal corporate tax rate to 21% became effective on January 1, 2018. In fiscal 2018, our statutory federal corporate rate is a blended rate of 24.5%, which will be reduced to 21% in fiscal 2019 and thereafter.
Asposition as a result of the reduction in the federal corporatenew information obtained during an ongoing tax rate, we remeasured our net deferred tax liabilities as of the enactment date of the Tax Act. The deferred tax remeasurement resulted in a one-time, non-cash tax benefit estimated to be approximately $1.1 billion, recorded in the three months ended December 31, 2017.examination.
In transitioning to the new territorial tax system, the Tax Act requires that we include certain untaxed foreign earnings of non-U.S. subsidiaries in our fiscal 2018 taxable income. Such foreign earnings are subject to a one-time tax at 15.5% on the amount held in cash or cash equivalents, and at 8% on the remaining non-cash amount. The 15.5% and 8% tax, collectively referred to as the “transition tax”, was estimated to be $1.1 billion, and was recorded in the three months ended December 31, 2017. We intend to elect to pay the transition tax over a period of eight years as permitted by the Tax Act.
The above-mentioned accounting impacts of the deferred tax remeasurement and transition tax are provisional, based on currently available information and technical guidance on the interpretations of the new law. We continue to obtain and analyze additional information and guidance as they become available to complete the accounting for the tax impacts of the Tax Act. The provisional accounting impacts may change in future reporting periods until the accounting analysis is finalized, which will occur no later than the first quarter of fiscal 2019.
During the three months ended December 31, 2017, our gross unrecognized tax benefits increased by $44 million. Our net unrecognized tax benefits that, if recognized, would favorably impact the effective tax rate increased by $38 million. The increase in unrecognized tax benefits is primarily related to various tax positions across several jurisdictions. See Note 10—Income Taxes to our unaudited consolidated financial statements.
Adjusted effective income tax rate. Our financial results for the three months ended December 31, 2017 reflect the impact of certain significant items that we believe are not indicative of our operating performance in this period or future periods, as they were either non-recurring or had no cash impact. As such, we have presented our adjusted effective income tax rate for this period in the table below, which we believe provides a clearer understanding of our operating performance for the reported period. There were no comparable adjustments recorded for the three months ended December 31, 2016. See Overview—Adjusted financial results within this Management's Discussion and Analysis of Financial Condition and Results of Operations for descriptions of the adjustments in the tables below.
 Three Months Ended December 31, 2017
(in millions, except percentages)Income Before Income Taxes Income Tax Provision 
Effective Income Tax Rate(1)
As reported$3,239
 $717
 22.1%
Remeasurement of deferred tax balances
 1,133
  
Transition tax on foreign earnings
 (1,147)  
As adjusted$3,239
 $703
 21.7%
(1)
Figures in the table may not recalculate exactly due to rounding. Effective income tax rate is calculated based on unrounded numbers.

Liquidity and Capital Resources
Cash Flow Data
The following table summarizes our cash flow activity for the periods presented:
 Three Months Ended
December 31,
 20222021
 (in millions)
Total cash provided by (used in):
Operating activities$4,171 $4,232 
Investing activities(510)(547)
Financing activities(6,347)(4,967)
Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents692 (194)
Increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents$(1,994)$(1,476)
 Three Months Ended
December 31,
 2017 2016
 (in millions)
Total cash provided by (used in):   
Operating activities$2,762
 $2,508
Investing activities(707) (417)
Financing activities(3,871) (1,730)
Effect of exchange rate changes on cash and cash equivalents80
 (156)
(Decrease) increase in cash and cash equivalents$(1,736) $205
Operating activities. Cash provided by operating activities for the three months ended December 31, 20172022 was higherlower than the prior-year comparable period reflectingprimarily due to higher incentive payments, partially offset by continued growth in our underlying business.
Investing activities. Cash used in investing activities for the three months ended December 31, 20172022 was higherlower than the prior-year comparable period as purchasesprimarily due to the absence of available-for-sale investment securities reflected additional investmentcash paid for acquisitions combined with cash received from the settlement of net proceeds received from new fixed-rate senior notes issuedinvestment hedge derivative instruments in September 2017.the current year, partially offset by higher purchases, net of sales and maturities, of investment securities.
Financing activities. Cash used in financing activities for the three months ended December 31, 20172022was higher than the prior-year comparable period primarily due to the repaymentprincipal debt payment upon maturity of the 2017 Notesour December 2022 senior notes and an increase inhigher dividends paid, in the current year, while the prior year included proceeds from issuance of commercial paper. This increase was partially offset by payments from our litigation escrow accountlower share repurchases. See Note 6—Debt and a decrease in the repurchases of our class A common stock. See Note 2—U.S. and Europe Retrospective Responsibility Plans, Note 4—Debt and Note 7—Stockholders'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 available-for-sale investment securities based upon our funding requirements, access to liquidity from these holdings and the returns that these holdings provide. We believe that cash flow generated from operations, in conjunction with access to our other sources of liquidity, will be more than sufficient to meet our ongoing operational needs.
Cash and cash equivalents and short-term and long-term available-for-sale investment securities held by our foreign subsidiaries, primarily attributable to undistributed earnings, totaled $6.3 billion at December 31, 2017. This excludes $1.8 billion of cash and cash equivalents and available-for-sale investment securities we returned during the three months ended December 31, 2017 from our foreign subsidiaries to the United States. This transaction did not constitute a return of undistributed earnings. Pursuant to the Tax Act, we are required to pay U.S. tax on most of the undistributed and untaxed foreign earnings of non-U.S. subsidiaries accumulated as of December 31, 2017. If it were necessary to repatriate the undistributed earnings of our foreign subsidiaries for use in the United States in the future, the repatriated earnings would not be subject to further U.S. tax.
Uses of Liquidity
There has been no significant change to our primary uses of liquidity since September 30, 2017, except as discussed below. 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.

32

Senior Notes. In October 2017, we redeemed allUses of the $1.75 billion principal amount outstanding of the 2017 Notes. The redemption was funded with the net proceeds from the new fixed-rate senior notes issued in September 2017. Interest payments of $241 million were made in fiscal 2018. See Note 4—DebtLiquidity
There has been no significant change to our unaudited consolidated financial statements.primary uses of liquidity since September 30, 2022, except as discussed below.
Common stock repurchases.During the three months ended December 31, 2017,2022, we repurchased 16 million sharesof our class A common stock using $1.8 billion of cash on hand.in the open market for $3.1 billion. As of December 31, 2017, we2022, our repurchase programs had remaining authorized funds of $2.1 billion for share repurchase. All share repurchase programs authorized prior to April 2017 have been completed. In January 2018, our board of directors authorized an additional $7.5 billion share repurchase program.$14.1 billion. See Note 7—Stockholders'8—Stockholders’ Equity to our unaudited consolidated financial statements.
Dividends. During the three months ended December 31, 2017,2022, we declared and paid $458$945 million in dividends to holders of our common and preferred stock. InOn January 2018,24, 2023, our board of directors declared a quarterly cash dividend in the amount of $0.21$0.45 per share of class A common stock (determined in the case of class B and C common stock and UK&Iseries A, B and EuropeC convertible participating preferred stock on an as-converted basis), which will be paid on March 6, 2018, to all holders of record of our common and preferred stock as of February 16, 2018.. See Note 7—Stockholders'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 three series of preferred stock and class B and C common stock will share ratably on an as-converted basis in such future dividends.
Fair Value Measurements—Financial Instruments
As ofSenior notes. During the three months ended December 31, 2017, our financial instruments measured at fair value on a recurring basis included $12.62022, we repaid $2.25 billion of assets and $65 millionprincipal upon maturity of liabilities.our December 2022 senior notes. See Note 3—Fair Value Measurements and Investments6—Debt to our unaudited consolidated financial statements.
Litigation. During the three months ended December 31, 2022, we deposited $350 million into the U.S. litigation escrow account to address claims associated with the interchange multidistrict litigation. The balance of this account as of December 31, 2022 was $1.7 billion and is reflected as restricted cash in our consolidated balance sheets. See Note 4—U.S. and Europe Retrospective Responsibility Plans and Note 12—Legal Matters to our unaudited consolidated financial statements.
Accounting Pronouncements Not Yet Adopted
In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-04, which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate or another reference rate expected to be discontinued because of reference rate reform. Subsequently, the FASB also issued amendments to this standard. The amendments in the ASU are effective upon issuance through December 31, 2024. The adoption of ASU 2020-04 and its subsequent amendments is 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 during the three months ended December 31, 2017, compared tosince September 30, 2017.2022.
ITEM 4.Controls and Procedures
DisclosureEvaluation of disclosure controls and procedures. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) of Visa Inc. at the end of the period covered by this report and, based on such evaluation, have concluded that the disclosure controls and procedures of Visa Inc. were effective at the reasonable assurance level as of such date.
Changes in internal control over financial reporting. There hashave been no changechanges in theour internal control over financial reporting of Visa Inc. that occurred during theour first quarter of fiscal period covered by this report2023 that hashave materially affected, or is reasonably likely to materially affect, ourthe Company’s internal control over financial reporting.

33

Table of Contents
PART II. OTHER INFORMATION
 
ITEM 1.Legal Proceedings.
Refer to Note 11—12—Legal Matters to the unaudited consolidated financial statements included in this Form 10-Q for a description of the Company’s current material legal proceedings.
ITEM 1A.Risk Factors.
For a discussion of the Company’s risk factors, see the information under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended September 30, 2017, filed with the SEC on November 17, 2017.

2022.
34

Table of Contents
ITEM 2.Unregistered Sales of Equity Securities and Use of Proceeds.
ISSUER PURCHASES OF EQUITY SECURITIESIssuer Purchases of Equity Securities
The table below sets forth the Company’spresents our purchases of common stock during the three months ended December 31, 2017.2022:
PeriodTotal Number 
of Shares
Purchased
Average Purchase Price 
per Share
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs(1)
Approximate Dollar Value
of Shares that May Yet Be Purchased
Under the Plans or Programs(1)
(in millions, except per share data)
October 1 - 31, 2022$188.21 $15,885 
November 1 - 30, 2022$204.28 $14,900 
December 1 - 31, 2022$208.21 $14,000 
Total16 $198.74 16 
(1)The figures in the table reflect transactions according to the trade dates. For purposes of our unaudited consolidated financial statements included in this Form 10-Q, the impact of these repurchases is recorded according to the settlement dates.
See Note 8—Stockholders’ Equity to our unaudited consolidated financial statements for further discussion on our share repurchase programs.
Period
Total Number 
of Shares
Purchased(1)
 
Average Price 
Paid per Share
 
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs(2),(3)
 
Approximate Dollar Value
of Shares that May Yet Be Purchased
Under the Plans or Programs(2),(3)
October 1-31, 20172,759,883
 $107.13
 2,759,883
 $3,498,752,595
November 1-30, 20175,414,230
 $110.99
 5,278,751
 $2,912,592,445
December 1-31, 20177,508,416
 $111.73
 7,508,416
 $2,073,527,997
Total15,682,529
 $110.67
 15,547,050
  
(1)
Includes 135,479 shares of class A common stock withheld at an average price of $109.82 per share (per the terms of grants under our 2007 Equity Incentive Compensation Plan) to offset tax withholding obligations that occur upon vesting and release of restricted shares.
(2)
The figures in the table reflect transactions according to trade dates. For purposes of our unaudited consolidated financial statements included in this Form 10-Q, the impact of these repurchases is recorded according to settlement dates.
(3)
Our board of directors from time to time authorizes the repurchase of shares of our common stock up to a certain monetary limit. In April 2017 and January 2018, our board of directors authorized share repurchase programs for $5.0 billion and $7.5 billion, respectively. These authorizations have no expiration date. All share repurchase programs authorized prior to April 2017 have been completed.
ITEM 3.Defaults Upon Senior Securities.
None.
ITEM 4.Mine Safety Disclosures.
Not applicable.
ITEM 5.Other Information.
None.
35

Table of Contents
ITEM 6.Exhibits.
EXHIBIT INDEX
Incorporated by Reference
Exhibit
Number
Description of DocumentsSchedule/ FormFile NumberExhibitFiling Date
Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer
Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer
Section 1350 Certification of Principal Executive and Financial Officer
101.INS+Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH+Inline XBRL Taxonomy Extension Schema Document
101.CAL+Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF+Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB+Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE+Inline XBRL Taxonomy Extension Presentation Linkbase Document
104+Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
ITEM 6.+Exhibits.Filed or furnished herewith.
The list
36

Table of exhibits required to be filed as exhibits to this report is listed in the “Exhibit Index,” which is incorporated herein by reference.Contents

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
VISA INC.
Date:February 1, 2018By:/s/ Alfred F. Kelly, Jr.
Name:Alfred F. Kelly, Jr.
Title:
Chief Executive Officer
(Principal Executive Officer)
Date:February 1, 2018By:/s/ Vasant M. Prabhu
Name:Vasant M. Prabhu
Title:
Chief Financial Officer
(Principal Financial Officer)
Date:February 1, 2018By:/s/ James H. Hoffmeister
Name:James H. Hoffmeister
Title:
Global Corporate Controller and
Chief Accounting Officer
(Principal Accounting Officer)

EXHIBIT INDEX
Incorporated by Reference
Exhibit
Number
Description of DocumentsSchedule/ FormFile NumberExhibitFiling Date
101.INS+XBRL Instance Document
101.SCH+XBRL Taxonomy Extension Schema Document
101.CAL+XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF+XBRL Taxonomy Extension Definition Linkbase Document
101.LAB+XBRL Taxonomy Extension Label Linkbase Document
101.PRE+XBRL Taxonomy Extension Presentation Linkbase Document
VISA INC.
+Date:Filed or furnished herewith.January 27, 2023By:/s/ Alfred F. Kelly, Jr.
Name:Alfred F. Kelly, Jr.
Title:Chairman and Chief Executive Officer
(Principal Executive Officer)
Date:January 27, 2023By:/s/ Vasant M. Prabhu
Name:Vasant M. Prabhu
Title:Vice Chair, Chief Financial Officer
(Principal Financial Officer)
Date:January 27, 2023By:/s/ Peter M. Andreski
Name:Peter M. Andreski
Title:Global Corporate Controller, Chief Accounting Officer
(Principal Accounting Officer)

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