Item 1. Financial Statements (Unaudited)

VISA INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

			June 30, 2023						September 30, 2022
			(in millions, except per share data)
Assets
Cash and cash equivalents			$	15,590					$	15,689
Restricted cash equivalents—U.S. litigation escrow			1,627						1,449
Investment securities			3,166						2,833
Settlement receivable			2,454						1,932
Accounts receivable			2,282						2,020
Customer collateral			2,907						2,342
Current portion of client incentives			1,525						1,272
Prepaid expenses and other current assets			2,119						2,668
Total current assets			31,670						30,205
Investment securities			2,122						2,136
Client incentives			3,811						3,348
Property, equipment and technology, net			3,370						3,223
Goodwill			18,082						17,787
Intangible assets, net			26,576						25,065
Other assets			3,603						3,737
Total assets			$	89,234					$	85,501
Liabilities
Accounts payable			$	281					$	340
Settlement payable			3,675						3,281
Customer collateral			2,907						2,342
Accrued compensation and benefits			1,215						1,359
Client incentives			7,532						6,099
Accrued liabilities			4,075						3,726
Current maturities of debt			—						2,250
Accrued litigation			1,545						1,456
Total current liabilities			21,230						20,853
Long-term debt			20,560						20,200
Deferred tax liabilities			5,380						5,332
Other liabilities			3,083						3,535
Total liabilities			50,253						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 outstanding			1,786						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); 1,862 (Class A 1,607, Class B 245, Class C 10) and 1,890 (Class A 1,635, Class B 245, Class C 10) shares issued and outstanding			20,290						19,545
Right to recover for covered losses			(25)						(35)
Accumulated income			17,908						16,116
Accumulated other comprehensive income (loss), net:
Investment securities			(80)						(106)
Defined benefit pension and other postretirement plans			(158)						(169)
Derivative instruments			(259)						418
Foreign currency translation adjustments			(481)						(2,512)
Total accumulated other comprehensive income (loss), net			(978)						(2,369)
Total equity			38,981						35,581
Total liabilities and equity			$	89,234					$	85,501

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

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VISA INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED**)**

			Three Months Ended June 30,												Nine Months Ended June 30,
			2023						2022						2023						2022
			(in millions, except per share data)
Net revenues			$	8,123					$	7,275					$	24,044					$	21,523
Operating Expenses
Personnel			1,481						1,283						4,333						3,634
Marketing			297						313						938						907
Network and processing			182						178						539						558
Professional fees			133						117						372						342
Depreciation and amortization			235						230						696						635
General and administrative			314						289						918						856
Litigation provision			457						717						798						865
Total operating expenses			3,099						3,127						8,594						7,797
Operating income			5,024						4,148						15,450						13,726
Non-operating Income (Expense)
Interest expense			(182)						(111)						(461)						(379)
Investment income (expense) and other			304						(208)						412						(79)
Total non-operating income (expense)			122						(319)						(49)						(458)
Income before income taxes			5,146						3,829						15,401						13,268
Income tax provision			990						418						2,809						2,251
Net income			$	4,156					$	3,411					$	12,592					$	11,017
Basic Earnings Per Share
Class A common stock			$	2.00					$	1.60					$	6.03					$	5.15
Class B common stock			$	3.20					$	2.59					$	9.65					$	8.33
Class C common stock			$	8.00					$	6.42					$	24.10					$	20.58
Basic Weighted-average Shares Outstanding
Class A common stock			1,614						1,642						1,623						1,655
Class B common stock			245						245						245						245
Class C common stock			10						10						10						10
Diluted Earnings Per Share
Class A common stock			$	2.00					$	1.60					$	6.02					$	5.14
Class B common stock			$	3.19					$	2.59					$	9.64					$	8.33
Class C common stock			$	7.99					$	6.41					$	24.08					$	20.56
Diluted Weighted-average Shares Outstanding
Class A common stock			2,080						2,129						2,092						2,143
Class B common stock			245						245						245						245
Class C common stock			10						10						10						10

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

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VISA INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

			Three Months Ended June 30,												Nine Months Ended June 30,
			2023						2022						2023						2022
			(in millions)
Net income			$	4,156					$	3,411					$	12,592					$	11,017
Other comprehensive income (loss):
Investment securities:
Net unrealized gain (loss)			(18)						(43)						33						(93)
Income tax effect			4						10						(7)						20
Defined benefit pension and other postretirement plans:
Net unrealized actuarial gain (loss) and prior service credit (cost)			1						—						6						(1)
Income tax effect			—						—						(1)						—
Reclassification adjustments			3						—						7						2
Income tax effect			(1)						—						(1)						—
Derivative instruments:
Net unrealized gain (loss)			(4)						348						(195)						539
Income tax effect			5						(68)						36						(103)
Reclassification adjustments			18						(9)						17						(48)
Income tax effect			(10)						—						(17)						4
Foreign currency translation adjustments			14						(1,100)						1,513						(2,023)
Other comprehensive income (loss), net of tax			12						(862)						1,391						(1,703)
Comprehensive income			$	4,168					$	2,549					$	13,983					$	9,314

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

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VISA INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(UNAUDITED)

			Three Months Ended June 30, 2023
			Preferred Stock												Common Stock and Additional Paid-in Capital												Right to Recover for Covered Losses						Accumulated Income						Accumulated Other Comprehensive Income (Loss), Net						Total Equity
			Shares						Amount						Shares						Amount
			(in millions, except per share data)
Balance as of March 31, 2023			5						$	1,885					1,874						$	20,095					$	(35)					$	17,610					$	(990)					$	38,565
Net income																																	4,156												4,156
Other comprehensive income (loss), net of tax																																							12						12
VE territory covered losses incurred																											(6)																		(6)
Recovery through conversion rate adjustment									(16)																		16																		—
Conversion to class A common stock upon sales into public market			—			(1)			(83)						1						83																								—
Share-based compensation expense																					191																								191
Stock issued under equity plans															1						71																								71
Restricted stock and performance-based shares settled in cash for taxes															(1)						(7)																								(7)
Cash dividends declared and paid, at a quarterly amount of $0.45 per class A common stock																																	(937)												(937)
Repurchase of class A common stock															(13)						(143)												(2,921)												(3,064)
Balance as of June 30, 2023			5						$	1,786					1,862						$	20,290					$	(25)					$	17,908					$	(978)					$	38,981

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

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

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VISA INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—(Continued)

(UNAUDITED)

			Nine Months Ended June 30, 2023
			Preferred Stock												Common Stock and Additional Paid-in Capital												Right to Recover for Covered Losses						Accumulated Income						Accumulated Other Comprehensive Income (Loss), Net						Total Equity
			Shares						Amount						Shares						Amount
			(in millions, except per share data)
Balance as of September 30, 2022			5						$	2,324		(1)			1,890						$	19,545					$	(35)					$	16,116					$	(2,369)					$	35,581
Net income																																	12,592												12,592
Other comprehensive income (loss), net of tax																																							1,391						1,391
VE territory covered losses incurred																											(21)																		(21)
Recovery through conversion rate adjustment									(30)																		31																		1
Conversion to class A common stock upon sales into public market			—			(2)			(508)						8						508																								—
Share-based compensation expense																					591																								591
Stock issued under equity plans															4						189																								189
Restricted stock and performance-based shares settled in cash for taxes															(1)						(125)																								(125)
Cash dividends declared and paid, at a quarterly amount of $0.45 per class A common stock																																	(2,823)												(2,823)
Repurchase of class A common stock															(39)						(418)												(7,977)												(8,395)
Balance as of June 30, 2023			5						$	1,786		(1)			1,862						$	20,290					$	(25)					$	17,908					$	(978)					$	38,981

(1)As of June 30, 2023 and September 30, 2022, the book value of series A preferred stock was $544 million and $1.0 billion, respectively. Refer to Note 5—U.S. 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.

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VISA INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—(Continued)

(UNAUDITED)

			Three Months Ended June 30, 2022
			Preferred Stock												Common Stock and Additional Paid-in Capital												Right to Recover for Covered Losses						Accumulated Income						Accumulated Other Comprehensive Income (Loss), Net						Total Equity
			Shares						Amount						Shares						Amount
			(in millions, except per share data)
Balance as of March 31, 2022			5						$	2,987					1,903						$	18,876					$	(120)					$	14,651					$	(405)					$	35,989
Net income																																	3,411												3,411
Other comprehensive income (loss), net of tax																																							(862)						(862)
VE territory covered losses incurred																											(15)																		(15)
Recovery through conversion rate adjustment									(112)																		112																		—
Conversion to class A common stock upon sales into public market			—			(1)			(24)						1						24																								—
Share-based compensation expense																					152																								152
Stock issued under equity plans															—			(1)			40																								40
Restricted stock and performance-based shares settled in cash for taxes															—			(1)			(1)																								(1)
Cash dividends declared and paid, at a quarterly amount of $0.375 per class A common stock																																	(798)												(798)
Repurchase of class A common stock															(12)						(129)												(2,304)												(2,433)
Balance as of June 30, 2022			5						$	2,851					1,892						$	18,962					$	(23)					$	14,960					$	(1,267)					$	35,483

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

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

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VISA INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—(Continued)

(UNAUDITED)

			Nine Months Ended June 30, 2022
			Preferred Stock												Common Stock and Additional Paid-in Capital												Right to Recover for Covered Losses						Accumulated Income						Accumulated Other Comprehensive Income (Loss), Net						Total Equity
			Shares						Amount						Shares						Amount
			(in millions, except per share data)
Balance as of September 30, 2021			5						$	3,080					1,932						$	18,855					$	(133)					$	15,351					$	436					$	37,589
Net income																																	11,017												11,017
Other comprehensive income (loss), net of tax																																							(1,703)						(1,703)
VE territory covered losses incurred																											(31)																		(31)
Recovery through conversion rate adjustment									(141)																		141																		—
Conversion to class A common stock upon sales into public market			—			(1)			(88)						2						88																								—
Share-based compensation expense																					470																								470
Stock issued under equity plans															4						153																								153
Restricted stock and performance-based shares settled in cash for taxes															—			(1)			(117)																								(117)
Cash dividends declared and paid, at a quarterly amount of $0.375 per class A common stock																																	(2,409)												(2,409)
Repurchase of class A common stock															(46)						(487)												(8,999)												(9,486)
Balance as of June 30, 2022			5						$	2,851					1,892						$	18,962					$	(23)					$	14,960					$	(1,267)					$	35,483

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

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

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VISA INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

			Nine Months Ended June 30,
			2023						2022
			(in millions)
Operating Activities
Net income			$	12,592					$	11,017
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Client incentives			8,858						7,435
Share-based compensation expense			591						470
Depreciation and amortization of property, equipment, technology and intangible assets			696						635
Deferred income taxes			(253)						(203)
VE territory covered losses incurred			(21)						(31)
(Gains) losses on equity investments, net			111						142
Other			(7)						(71)
Change in operating assets and liabilities:
Settlement receivable			(373)						(248)
Accounts receivable			(228)						(80)
Client incentives			(8,188)						(7,038)
Other assets			(66)						(455)
Accounts payable			(51)						(29)
Settlement payable			114						886
Accrued and other liabilities			(34)						37
Accrued litigation			87						506
Net cash provided by (used in) operating activities			13,828						12,973
Investing Activities
Purchases of property, equipment and technology			(754)						(675)
Investment securities:
Purchases			(2,817)						(4,415)
Proceeds from maturities and sales			2,410						2,580
Acquisitions, net of cash and restricted cash acquired			—						(1,945)
Purchases of other investments			(81)						(68)
Settlement of derivative instruments			402						—
Other investing activities			22						128
Net cash provided by (used in) investing activities			(818)						(4,395)
Financing Activities
Repurchase of class A common stock			(8,350)						(9,486)
Repayments of debt			(2,250)						—
Dividends paid			(2,823)						(2,409)
Proceeds from issuance of senior notes			—						3,218
Cash proceeds from issuance of class A common stock under equity plans			189						153
Restricted stock and performance-based shares settled in cash for taxes			(125)						(117)
Other financing activities			167						(15)
Net cash provided by (used in) financing activities			(13,192)						(8,656)
Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents			844						(725)
Increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents			662						(803)
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period			20,377						19,799
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period			$	21,039					$	18,996
Supplemental Disclosure
Cash paid for income taxes, net			$	3,013					$	2,891
Interest payments on debt			$	568					$	548
Accruals related to purchases of property, equipment and technology			$	87					$	34

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

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VISA INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 1—Summary of Significant Accounting Policies

Organization. Visa Inc., together with its subsidiaries (Visa or the Company), is a global payments technology company that facilitates global commerce and money movement across more than 200 countries and territories. Visa operates one of the world’s largest electronic payments networks — VisaNet — which provides transaction processing services (primarily authorization, clearing and settlement). The Company offers products, solutions and services that facilitate secure, reliable and efficient money movement for participants in the ecosystem. Visa is not a financial institution and does not issue cards, extend credit or set rates and fees for account holders of Visa products. In most cases, account holder and merchant relationships belong to, and are managed by, Visa’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). The Company consolidates its majority-owned and controlled entities, including variable interest entities (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. Intercompany balances and transactions have been eliminated in consolidation.

The accompanying unaudited consolidated financial statements are presented in accordance with U.S. Securities and Exchange Commission (SEC) requirements for Quarterly Reports on Form 10-Q and, consequently, do not include all of the annual disclosures required by U.S. GAAP. Reference should be made to Visa’s Annual Report on Form 10-K for the year ended September 30, 2022 for additional disclosures, including a summary of the Company’s significant accounting policies.

In the opinion of management, the accompanying unaudited consolidated financial statements include all normal recurring adjustments necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the interim periods presented. The results of operations for interim periods are not necessarily indicative of results for the full year.

Use of estimates. The preparation of the accompanying unaudited consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions about future events. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited consolidated financial statements and reported amounts of revenues and expenses during the reporting period. These estimates may change as new events occur and additional information is obtained, and will be recognized in the period in which such changes occur. Future actual results could differ materially from these estimates.

Recently Adopted Accounting Pronouncement. In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-04, which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate (LIBOR) or another reference rate expected to be discontinued because of reference rate reform. Subsequently, the FASB also issued amendments to this standard. The amendments in the ASU are effective upon issuance through December 31, 2024. During the prior quarter, the Company adopted certain optional expedients provided in this ASU in relation to contract modifications and hedge accounting. The adoption did not have a material impact on the consolidated financial statements.

VISA INC.

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

Note 2—Acquisitions

Pending Acquisition

In June 2023, Visa entered into a definitive agreement to acquire Pismo Holdings, a cloud-native issuer processing and core banking platform with operations in Latin America, Asia Pacific and Europe, for $1.0 billion in cash. This acquisition is subject to customary closing conditions, including applicable regulatory reviews and approvals.

Note 3—Revenues

The nature, amount, timing and uncertainty of the Company’s revenues and cash flows and how they are affected by economic factors are most appropriately depicted through the Company’s revenue categories and geographical markets. The following tables disaggregate the Company’s net revenues by revenue category and by geography:

			Three Months Ended June 30,												Nine Months Ended June 30,
			2023						2022						2023						2022
			(in millions)
Service revenues			$	3,668					$	3,189					$	10,950					$	9,903
Data processing revenues			4,105						3,579						11,751						10,673
International transaction revenues			2,920						2,560						8,466						6,942
Other revenues			597						517						1,735						1,440
Client incentives			(3,167)						(2,570)						(8,858)						(7,435)
Net revenues			$	8,123					$	7,275					$	24,044					$	21,523

			Three Months Ended June 30,												Nine Months Ended June 30,
			2023						2022						2023						2022
			(in millions)
U.S.			$	3,443					$	3,170					$	10,550					$	9,427
International			4,680						4,105						13,494						12,096
Net revenues			$	8,123					$	7,275					$	24,044					$	21,523

Note 4—Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents

The Company reconciles cash, cash equivalents, restricted cash and restricted cash equivalents reported in the consolidated balance sheets that aggregate to the beginning and ending balances shown in the consolidated statements of cash flows as follows:

			June 30, 2023						September 30, 2022
			(in millions)
Cash and cash equivalents			$	15,590					$	15,689
Restricted cash and restricted cash equivalents:
U.S. litigation escrow			1,627						1,449
Customer collateral			2,907						2,342
Prepaid expenses and other current assets			915						897
Cash, cash equivalents, restricted cash and restricted cash equivalents			$	21,039					$	20,377

VISA INC.

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

Note 5—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. covered litigation” are paid. The accrual related to the U.S. covered litigation could be either higher or lower than the U.S. litigation escrow account balance. See Note 13—Legal Matters.

The following table presents the changes in the restricted cash equivalents—U.S. litigation escrow account:

			Nine Months Ended June 30,
			2023						2022
			(in millions)
Balance at beginning of period			$	1,449					$	894
Deposits into the U.S. litigation escrow account			850						850
Payments to opt-out merchants(1), net of interest earned on escrow funds			(672)						(261)
Balance at end of period			$	1,627					$	1,483

(1)These payments are associated with the interchange multidistrict litigation. See Note 13—Legal Matters.

Europe Retrospective Responsibility Plan

Visa Inc., Visa International and Visa Europe are parties to certain existing and potential litigation relating to the setting of multilateral interchange fee rates in the Visa Europe territory (VE territory covered litigation). Under the terms of the Europe retrospective responsibility plan, the Company is entitled to recover certain losses resulting from VE territory covered litigation (VE territory covered losses) through a periodic adjustment to the class A common stock conversion rates applicable to the series B and C preferred stock. VE territory covered losses are recorded in a contra-equity account referred to as “right to recover for covered 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 to recover for covered losses” as contra-equity is then recorded against the book value of the preferred stock within stockholders’ equity.

VISA INC.

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

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

			Preferred Stock												Right to Recover for Covered Losses
			Series B						Series C
			(in millions)
Balance as of September 30, 2022			$	460					$	812					$	(35)
VE territory covered losses incurred(1)			—						—						(21)
Recovery through conversion rate adjustment(2)			(19)						(11)						31
Balance as of June 30, 2023			$	441					$	801					$	(25)

			Preferred Stock												Right to Recover for Covered Losses
			Series B						Series C
			(in millions)
Balance as of September 30, 2021			$	1,071					$	1,523					$	(133)
VE territory covered losses incurred(1)			—						—						(31)
Recovery through conversion rate adjustment			(135)						(6)						141
Balance as of June 30, 2022			$	936					$	1,517					$	(23)

(1)VE territory covered losses incurred reflect settlements with merchants and additional legal costs. See Note 13—Legal 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.

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

			June 30, 2023												September 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			$	1,730					$	441					$	1,309					$	460
Series C preferred stock			2,721						801						2,044						812
Total			4,451						1,242						3,353						1,272
Less: right to recover for covered losses			(25)						(25)						(35)						(35)
Total recovery for covered losses available			$	4,426					$	1,217					$	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 June 30, 2023, the as-converted value of preferred stock is calculated as the product of: (a) 2 million and 3 million shares of the series B and C preferred stock outstanding, respectively; (b) 2.937 and 3.629, the class A common stock conversion rate applicable to the series B and C preferred stock outstanding, respectively; and (c) $237.48, Visa’s class A common stock closing stock price.

(3)As of September 30, 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.

VISA INC.

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

Note 6—Fair Value Measurements and Investments

Assets and Liabilities Measured at Fair Value on a Recurring Basis

			Fair Value Measurements Using Inputs Considered as
			Level 1												Level 2
			June 30, 2023						September 30, 2022						June 30, 2023						September 30, 2022
			(in millions)
Assets
Cash equivalents and restricted cash equivalents:
Money market funds			$	12,605					$	11,736					$	—					$	—
U.S. Treasury securities			175						799						—						—
Investment securities:
Marketable equity securities			347						437						—						—
U.S. government-sponsored debt securities			—						—						1,153						457
U.S. Treasury securities			3,788						4,005						—						—
Other current and non-current assets:
Money market funds			23						22						—						—
Derivative instruments			—						—						197						1,131
Total			$	16,938					$	16,999					$	1,350					$	1,588
Liabilities
Accrued compensation and benefits:
Deferred compensation liability			$	181					$	146					$	—					$	—
Accrued and other liabilities:
Derivative instruments			—						—						482						418
Total			$	181					$	146					$	482					$	418

Level 1 assets and liabilities. Money market funds, U.S. Treasury securities and marketable equity securities are classified as Level 1 within the fair value hierarchy, as fair value is based on unadjusted quoted prices in active markets for identical assets. The Company’s deferred compensation liability is measured at fair value based on marketable equity securities held under the deferred compensation plan.

Level 2 assets and 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. Derivative instruments are valued using inputs that are observable in the market or can be derived principally from or corroborated by observable market data.

U.S. Government-sponsored Debt Securities and U.S. Treasury Securities

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

			June 30, 2023
			Amortized Cost						Gross Unrealized												Fair Value
			Gains						Losses
			(in millions)
U.S. government-sponsored debt securities			$	1,155					$	—					$	(2)					$	1,153
U.S. Treasury securities			4,062						—						(99)						3,963
Total			$	5,217					$	—					$	(101)					$	5,116

VISA INC.

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

			September 30, 2022
			Amortized Cost						Gross Unrealized												Fair Value
			Gains						Losses
			(in millions)
U.S. government-sponsored debt securities			$	458					$	—					$	(1)					$	457
U.S. Treasury securities			4,937						—						(133)						4,804
Total			$	5,395					$	—					$	(134)					$	5,261

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

			June 30, 2023
			Less Than 12 Months												12 Months or Greater
			Fair Value						Gross Unrealized Losses						Fair Value						Gross Unrealized Losses
			(in millions)
U.S. government-sponsored debt securities			$	584					$	(2)					$	—					$	—
U.S. Treasury securities			1,524						(17)						2,165						(82)
Total			$	2,108					$	(19)					$	2,165					$	(82)

			September 30, 2022
			Less Than 12 Months
			Fair Value						Gross Unrealized Losses
			(in millions)
U.S. government-sponsored debt securities			$	408					$	(1)
U.S. Treasury securities			3,507						(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:

						June 30, 2023
						(in millions)
Due within one year						$	2,994
Due after 1 year through 5 years						2,122
Total						$	5,116

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

VISA INC.

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

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

			June 30, 2023
			(in millions)
Initial cost basis			$	764
Adjustments:
Upward adjustments			899
Downward adjustments (including impairment)			(431)
Carrying amount, end of period			$	1,232

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

			Three Months Ended June 30,												Nine Months Ended June 30,
			2023						2022						2023						2022
			(in millions)
Upward adjustments			$	75					$	5					$	94					$	231
Downward adjustments (including impairment)			$	—					$	(284)					$	(86)					$	(337)

For the three months ended June 30, 2023 and 2022, the Company recognized net unrealized gains of $96 million and net unrealized losses of $278 million, respectively, on marketable and non-marketable equity securities still held as of quarter end. For the nine months ended June 30, 2023 and 2022, the Company recognized net unrealized losses of $85 million and $262 million, respectively, on marketable and non-marketable equity securities still held as of quarter end.

Other Fair Value Disclosures

Debt. Debt instruments are measured at amortized cost on the Company’s consolidated balance sheets. The fair value of the debt instruments, as provided by third-party pricing vendors, is based on quoted prices in active markets for similar, not identical, assets. If measured at fair value in the financial statements, these instruments would be classified as Level 2 in the fair value hierarchy. As of June 30, 2023, the carrying value and estimated fair value of debt was $20.6 billion and $18.6 billion, respectively. As of September 30, 2022, the carrying value and estimated fair value of debt was $22.5 billion and $19.9 billion, respectively.

Other financial instruments not measured at fair value. As of June 30, 2023, the carrying values of settlement receivable and payable and customer collateral are an approximate fair value due to their generally short maturities. If measured at fair value in the financial statements, these financial instruments would be classified as Level 2 in the fair value hierarchy.

Non-financial assets. Certain non-financial assets such as goodwill, intangible assets and property, equipment and technology are subject to non-recurring fair value measurements if they are deemed to be impaired. The Company performed its annual impairment review of its indefinite-lived intangible assets and goodwill as of February 1, 2023, and concluded there was no impairment as of that date. No recent events or changes in circumstances indicated that impairment existed as of June 30, 2023.

VISA INC.

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

Note 7—Debt

The Company had outstanding debt as follows:

			June 30, 2023						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 2025			4,000						4,000						3.26		%
1.90% Senior Notes due April 2027			1,500						1,500						2.02		%
0.75% Senior Notes due August 2027			500						500						0.84		%
2.75% Senior Notes due September 2027			750						750						2.91		%
2.05% Senior Notes due April 2030			1,500						1,500						2.13		%
1.10% Senior Notes due February 2031			1,000						1,000						1.20		%
4.15% Senior Notes due December 2035			1,500						1,500						4.23		%
2.70% Senior Notes due April 2040			1,000						1,000						2.80		%
4.30% Senior Notes due December 2045			3,500						3,500						4.37		%
3.65% Senior Notes due September 2047			750						750						3.73		%
2.00% Senior Notes due August 2050			1,750						1,750						2.09		%
Euro notes
1.50% Senior Notes due June 2026			1,478						1,325						1.71		%
2.00% Senior Notes due June 2029			1,094						982						2.13		%
2.375% Senior Notes due June 2034			711						638						2.53		%
Total debt			21,033						22,945
Unamortized discounts and debt issuance costs			(164)						(173)
Hedge accounting fair value adjustments(2)			(309)						(322)
Total carrying value of debt			$	20,560					$	22,450
Reported as:
Current maturities of debt			$	—					$	2,250
Long-term debt			20,560						20,200
Total carrying value of debt			$	20,560					$	22,450

(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

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

Non-derivative Financial Instrument Designated as a Net Investment Hedge

During the nine months ended June 30, 2023, the Company designated €1.8 billion of the Euro-denominated fixed-rate senior notes (Euro Notes) issued in June 2022 as a hedge against a portion of the Company’s Euro-denominated net investment in Visa Europe. As of June 30, 2023, all of the €3.0 billion Euro Notes were designated as a net investment hedge.

Credit Facility

In May 2023, the Company entered into an amended and restated credit agreement for a 5 year, unsecured $7.0 billion revolving credit facility, which will expire in May 2028. Interest on borrowings will be charged at the applicable reference rate or an alternative base rate as defined in the credit agreement based on the currency and

VISA INC.

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

type of the borrowing, plus an applicable margin based on the applicable credit rating of the Company’s senior unsecured long-term debt. The Company has agreed to pay a commitment fee which will fluctuate based on such applicable rating of the Company. As of June 30, 2023, the Company was in compliance with all related covenants. This credit facility is maintained to ensure the integrity of the payment card settlement process and for general corporate purposes. As of June 30, 2023 and September 30, 2022, the Company had no amounts outstanding under the credit facility.

Note 8—Settlement Guarantee Management

The Company indemnifies its clients for settlement losses suffered due to failure of any other client 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, which vary significantly day to day. During the nine months ended June 30, 2023, the Company’s maximum daily settlement exposure was $125.6 billion and the average daily settlement exposure was $76.3 billion.

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

			June 30, 2023						September 30, 2022
			(in millions)
Restricted cash and restricted cash equivalents			$	2,907					$	2,342
Pledged securities at market value			408						213
Letters of credit			1,717						1,582
Guarantees			1,094						950
Total			$	6,126					$	5,087

VISA INC.

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

Note 9—Stockholders’ Equity

As-converted class A 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, were as follows:

			June 30, 2023																		September 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						8						—			(2)			100.0000						16
Series B preferred stock			2						2.9370						7						2						2.9710						7
Series C preferred stock			3						3.6290						11						3						3.6450						12
Class A common stock			1,607						—						1,607						1,635						—						1,635
Class B common stock			245						1.5902			(3)			390						245						1.6059			(3)			394
Class C common stock			10						4.0000						38						10						4.0000						39
Total															2,061																		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)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. The following table presents the reduction in the number of as-converted class B common stock after deposits into the U.S. litigation escrow account under the U.S. retrospective responsibility plan:

			Nine Months Ended June 30,
			2023						2022
			(in millions, except per share data)
Reduction in equivalent number of class A common stock			4						4
Effective price per share(1)			$	219.70					$	205.06
Deposits into the U.S. litigation escrow account			$	850					$	850

(1)Effective price per share for the period represents the weighted-average price calculated using the effective prices per share of the respective adjustments made during the period. Effective price per share for each adjustment is calculated using the volume-weighted average price of the Company’s class A common stock over a pricing period in accordance with the Company’s current certificate of incorporation.

VISA INC.

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

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

			Nine Months Ended June 30, 2023												Nine Months Ended June 30, 2022
			Series B						Series C						Series B						Series C
			(in millions, except per share data)
Reduction in equivalent number of class A common stock			—			(1)			—			(1)			1						—			(1)
Effective price per share(2)			$	219.12					$	215.28					$	203.08					$	202.55
Recovery through conversion rate adjustment			$	19					$	11					$	135					$	6

(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 period represents the weighted-average price calculated using the effective prices per share of the respective adjustments made during the period. Effective price per share for each adjustment is calculated using the volume-weighted average price of the Company’s class A common stock over a pricing period in accordance with the Company’s current certificates of designations for its series B and C preferred stock.

Common stock repurchases. The following table presents share repurchases in the open market:

			Three Months Ended June 30,												Nine Months Ended June 30,
			2023						2022						2023						2022
			(in millions, except per share data)
Shares repurchased in the open market(1)			13						12						39						46
Average repurchase cost per share(2)			$	229.00					$	202.81					$	214.44					$	208.30
Total cost(2)			$	3,064					$	2,433					$	8,395					$	9,486

(1)Shares repurchased in the open market reflect repurchases that settled during the three and nine months ended June 30, 2023 and 2022, respectively. All shares repurchased in the open market have been retired and constitute authorized but unissued shares.

(2)Figures in the table may not recalculate exactly due to rounding. Average repurchase cost per share and total cost are calculated based on unrounded numbers and include applicable taxes.

In October 2022, the Company’s board of directors authorized a $12.0 billion share repurchase program. This authorization has no expiration date. As of June 30, 2023, the Company’s repurchase program had remaining authorized funds of $8.8 billion. All share repurchase programs authorized prior to October 2022 have been completed.

Dividends. During the three months ended June 30, 2023 and 2022, the Company declared and paid dividends of $937 million and $798 million, respectively. During the nine months ended June 30, 2023 and 2022, the Company declared and paid dividends of $2.8 billion and $2.4 billion, respectively. On July 25, 2023, the Company’s board of directors declared a quarterly cash dividend of $0.45 per share of class A common stock (determined in the case of class B and C common stock and series A, B and C preferred stock on an as-converted basis), payable on September 1, 2023, to all holders of record as of August 11, 2023.

VISA INC.

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

Note 10—Earnings Per Share

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

			Basic Earnings Per Share																		Diluted 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			$	3,228					1,614						$	2.00					$	4,156					2,080			(3)			$	2.00
Class B common stock			785						245						$	3.20					$	784					245						$	3.19
Class C common stock			77						10						$	8.00					$	76					10						$	7.99
Participating securities			66						Not presented						Not presented						$	66					Not presented						Not presented
Net income			$	4,156

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

			Basic Earnings Per Share																		Diluted 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			$	9,778					1,623						$	6.03					$	12,592					2,092			(3)			$	6.02
Class B common stock			2,369						245						$	9.65					$	2,366					245						$	9.64
Class C common stock			233						10						$	24.10					$	233					10						$	24.08
Participating securities			212						Not presented						Not presented						$	211					Not presented						Not presented
Net income			$	12,592

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

			Basic Earnings Per Share																		Diluted 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			$	2,634					1,642						$	1.60					$	3,411					2,129			(3)			$	1.60
Class B common stock			637						245						$	2.59					$	636					245						$	2.59
Class C common stock			64						10						$	6.42					$	64					10						$	6.41
Participating securities			76						Not presented						Not presented						$	76					Not presented						Not presented
Net income			$	3,411

VISA INC.

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

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

			Basic Earnings Per Share																		Diluted Earnings Per Share
			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			$	8,518					1,655						$	5.15					$	11,017					2,143			(3)			$	5.14
Class B common stock			2,046						245						$	8.33					$	2,044					245						$	8.33
Class C common stock			207						10						$	20.58					$	207					10						$	20.56
Participating securities			246						Not presented						Not presented						$	246					Not presented						Not presented
Net income			$	11,017

(1)The weighted-average number of shares of as-converted class B common stock used in the income allocation was 393 million for the three and nine months ended June 30, 2023, and 397 million and 398 million for the three and nine months ended June 30, 2022, respectively. The weighted-average number of shares of as-converted class C common stock used in the income allocation was 38 million and 39 million for the three and nine months ended June 30, 2023, respectively, and 40 million for the three and nine months ended June 30, 2022. The weighted-average number of shares of preferred stock included within participating securities was 8 million and 10 million of as-converted series A preferred stock for the three and nine months ended June 30, 2023, respectively, and 6 million of as-converted series A preferred stock for the three and nine months ended June 30, 2022, 7 million of as-converted series B preferred stock for the three and nine months ended June 30, 2023 and 15 million and 16 million of as-converted series B preferred stock for the three and nine months ended June 30, 2022, respectively and 11 million of as-converted series C preferred stock for the three and nine months ended June 30, 2023 and 22 million of as-converted series C preferred stock for the three and nine months ended June 30, 2022.

(2)Figures in the table may not recalculate exactly due to rounding. 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 and nine months ended June 30, 2023 and 2022.

Note 11—Share-based Compensation

The following table presents the equity awards granted to employees and non-employee directors under the amended and restated 2007 Equity Incentive Compensation Plan (EIP) during the nine months ended June 30, 2023:

			Granted						Weighted-Average Grant Date Fair Value						Weighted-Average Exercise Price
Non-qualified stock options			798,017						$	58.56					$	211.09
Restricted stock units			3,130,396						$	210.81
Performance-based shares(1)			551,818						$	221.32

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

For the three months ended June 30, 2023 and 2022, the Company recorded share-based compensation expense related to the EIP of $184 million and $145 million, respectively. For the nine months ended June 30, 2023 and 2022, the Company recorded share-based compensation expense related to the EIP of $568 million and $447 million, respectively.

VISA INC.

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

Note 12—Income Taxes

For the three and nine months ended June 30, 2023, the effective income tax rates were 19% and 18%, respectively, and for the three and nine months ended June 30, 2022, the effective income tax rates were 11% and 17%, respectively. The difference in the effective tax rates is primarily due to the following:

• During the nine months ended June 30, 2023, a $142 million tax benefit related to prior years due to the reassessment of an uncertain tax position as a result of new information obtained during an ongoing tax examination; and

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

During the three and nine months ended June 30, 2023, the Company’s gross unrecognized tax benefits increased by $615 million and $593 million, respectively. The Company’s net unrecognized tax benefits that, if recognized, would favorably impact the effective tax rate, increased by $315 million and $192 million, respectively. The change in unrecognized tax benefits is related to various tax positions across several jurisdictions, including refund claims filed during the quarter. Additionally, the nine month period reflects the change in unrecognized tax benefits related to the reassessment mentioned above.

The Company’s tax filings are subject to examination by U.S. 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 13—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. For those proceedings where a loss is determined to be only reasonably possible or probable but not estimable, the Company has disclosed the nature of the claim. Additionally, unless otherwise disclosed below with respect to these proceedings, the Company cannot provide an estimate of the possible loss or range of 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’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:

			Nine Months Ended June 30,
			2023						2022
			(in millions)
Balance at beginning of period			$	1,456					$	983
Provision for uncovered legal matters			1						2
Provision for covered legal matters			808						878
Payments for legal matters			(720)						(377)
Balance at end of period			$	1,545					$	1,486

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. An accrual for the

VISA INC.

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

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 5—U.S. and Europe Retrospective Responsibility Plans.

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

			Nine Months Ended June 30,
			2023						2022
			(in millions)
Balance at beginning of period			$	1,441					$	881
Provision for interchange multidistrict litigation			797						861
Payments for U.S. covered litigation			(699)						(262)
Balance at end of period			$	1,539					$	1,480

During the three and nine months ended June 30, 2023, the Company recorded additional accruals of $456 million and $797 million, respectively, and deposited $500 million and $850 million, respectively, into the U.S. litigation escrow account to address claims associated with the interchange multidistrict litigation. 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 the 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 series B and C preferred stock. An accrual for the VE territory covered losses and a reduction to 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 5—U.S. and Europe Retrospective Responsibility Plans.

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

			Nine Months Ended June 30,
			2023						2022
			(in millions)
Balance at beginning of period			$	11					$	102
Provision for VE territory covered litigation			11						17
Payments for VE territory covered litigation			(19)						(114)
Balance at end of period			$	3					$	5

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

U.S. Covered Litigation

Interchange Multidistrict Litigation (MDL) - Putative Class Actions

On March 15, 2023, the U.S. Court of Appeals for the Second Circuit affirmed the final approval of the Amended Settlement Agreement by the district court.

Interchange Multidistrict Litigation (MDL) - Individual Merchant Actions

Visa has reached settlements with a number of merchants representing approximately 70% of the Visa-branded payment card sales volume of merchants who opted out of the Amended Settlement Agreement with the Damages Class plaintiffs. Additional summary judgment motions were filed by plaintiffs and defendants in an individual merchant action.

On July 14, 2023, Block, Inc. filed a lawsuit against Visa Inc., Visa U.S.A., Visa International, Mastercard Incorporated, and Mastercard International Incorporated in the U.S. District Court for the Eastern District of New York, generally pursuing claims on allegations similar to those raised in MDL 1720. Square, a business unit of Block, Inc., previously submitted a request to opt out of the Amended Settlement Agreement. The parties have requested reassignment of the case to the judge presiding over MDL 1720 for inclusion in MDL 1720.

Consumer Interchange Litigation

On December 30, 2022, a putative class action was filed in California state court against Visa, Mastercard, and certain financial institutions on behalf of all Visa and Mastercard cardholders in California who made a purchase using a Visa-branded or Mastercard-branded payment card in California from January 1, 2004. Plaintiffs primarily allege a conspiracy to fix interchange fees and seek injunctive relief, attorneys’ fees and damages as direct and indirect purchasers based on alleged violations of California law. On January 11, 2023, plaintiffs filed an amended complaint asserting the same claims as asserted in the prior complaint. On January 30, 2023, Visa removed the action to federal court. On February 10, 2023, the Judicial Panel on Multidistrict Litigation issued an order transferring the case to MDL 1720. On June 15, 2023, plaintiffs’ motion to remand the case to California state court was denied, and plaintiffs have appealed.

VE Territory Covered Litigation

Europe Merchant Litigation

Since July 2013, proceedings have been commenced by more than 1,100 Merchants (the capitalized term “Merchant” when used in this section, means a Merchant together with subsidiary/affiliate companies that are party to the same claim) against Visa Europe, Visa Inc. and other Visa subsidiaries in the UK and other countries primarily relating to interchange rates in Europe and in some cases relating to fees charged by Visa and certain Visa rules. As of the filing date, Visa has settled the claims asserted by over 175 Merchants, and there are approximately 900 Merchants with outstanding claims. In addition, over 30 additional Merchants have threatened to commence similar proceedings. Standstill agreements have been entered into with respect to some of those threatened Merchant claims, several of which have been settled.

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

Other Litigation

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

VISA INC.

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

Other Litigation

U.S. ATM Access Fee Litigation

On July 25, 2023, the U.S. Court of Appeals for the District of Columbia Circuit affirmed the district court’s class certification decisions.

European Commission Staged Digital Wallets Investigation

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

German ATM Litigation

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

EMV Chip Liability Shift

On November 30, 2022, Visa, jointly with other defendants, served a motion for summary judgment regarding the claims in the amended complaint and a motion to decertify the class.

U.S. Department of Justice Civil Investigative Demand (2021)

On January 4, 2023 and May 2, 2023, the Antitrust Division of the U.S. Department of Justice (Division) issued further Civil Investigative Demands seeking additional documents and information focusing on U.S. debit and competition with other payment methods and networks. Visa is cooperating with the Division in connection with the investigation.

Foreign Currency Exchange Rate Litigation

On December 21, 2022, plaintiffs filed a third amended complaint asserting the same claims as asserted in the prior complaints. On February 3, 2023, Visa filed a motion to dismiss the third amended complaint.

European Commission Client Incentive Agreements Investigation

On December 2, 2022, the 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.