VISA INC. [V] Filings

10-Q 1 v-20220331.htm 10-Q v-20220331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


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

For the quarterly period ended March 31, 2022


☐			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

VISA INC.

(Exact name of Registrant as specified in its charter)


Delaware		26-0267673
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

P.O. Box 8999		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 class

Trading Symbol

Name of each exchange on which registered

Class A Common Stock, par value $0.0001 per share

New 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 ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☑ No ☐

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 the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of April 20, 2022, there were 1,645,719,350 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 10,045,333 shares outstanding of the registrant’s class C common stock, par value $0.0001 per share.

Table of Contents

VISA INC.

TABLE OF CONTENTS



		Page
PART I.	Financial Information	4

Item 1.	Financial Statements (Unaudited)	4
	Consolidated Balance Sheets—March 31, 202 2 and September 30, 2021	4
	Consolidated Statements of Operations—Three and Six Months Ended March 31, 202 2 and 202 1	5
	Consolidated Statements of Comprehensive Income—Three and Six Months Ended March 31, 202 2 and 20 21	6
	Consolidated Statements of Changes in Equity—Three and Six Months Ended March 31, 202 2 and 202 1	7
	Consolidated Statements of Cash Flows—Six Months Ended Mar ch 31, 202 2 and 202 1	11
	Notes to Consolidated Financial Statements (Unaudited)	12
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	37

PART II.	Other Information	38

Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3.	Defaults Upon Senior Securities	40
Item 4.	Mine Safety Disclosures	40
Item 5.	Other Information	40
Item 6.	Exhibits	41
	Signatures	42

Table of Contents

PART I. FINANCIAL INFORMATION


ITEM 1.			Financial Statements (Unaudited)

VISA INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


	March 31, 2022		September 30, 2021
	(in millions, except per share data)
Assets
Cash and cash equivalents	$	12,299	$	16,487
Restricted cash equivalents—U.S. litigation escrow	882		894
Investment securities	1,230		2,025


Settlement receivable	1,632		1,758
Accounts receivable	2,135		1,968
Customer collateral	2,309		2,260
Current portion of client incentives	1,309		1,359
Prepaid expenses and other current assets	2,295		856
Total current assets	24,091		27,607
Investment securities	2,296		1,705
Client incentives	3,256		3,245
Property, equipment and technology, net	3,120		2,715
Goodwill	18,143		15,958
Intangible assets, net	27,006		27,664
Other assets	3,896		4,002
Total assets	$	81,808	$	82,896
Liabilities
Accounts payable	$	182	$	266
Settlement payable	2,409		2,443
Customer collateral	2,309		2,260
Accrued compensation and benefits	877		1,211
Client incentives	5,436		5,243
Accrued liabilities	3,172		2,334

Current maturities of debt	3,548		999
Accrued litigation	769		983
Total current liabilities	18,702		15,739
Long-term debt	17,479		19,978
Deferred tax liabilities	6,081		6,128
Other liabilities	3,557		3,462
Total liabilities	45,819		45,307
Equity
Preferred stock, $0.0001 par value, 25 shares authorized and 5 shares issued and outstanding as follows:
Series A convertible participating preferred stock, less than one shares issued and outstanding at March 31, 2022 and September 30, 2021 (the “series A preferred stock”)	422		486
Series B convertible participating preferred stock, 2 shares issued and outstanding at March 31, 2022 and September 30, 2021 (the “series B preferred stock”)	1,045		1,071
Series C convertible participating preferred stock, 3 shares issued and outstanding at March 31, 2022 and September 30, 2021 (the “series C preferred stock”)	1,520		1,523
Class A common stock, $0.0001 par value, 2,001,622 shares authorized, 1,648 and 1,677 shares issued and outstanding at March 31, 2022 and September 30, 2021 respectively	—		—
Class B common stock, $0.0001 par value, 622 shares authorized, 245 shares issued and outstanding at March 31, 2022 and September 30, 2021	—		—
Class C common stock, $0.0001 par value, 1,097 shares authorized, 10 shares issued and outstanding at March 31, 2022 and September 30, 2021	—		—

Right to recover for covered losses	(120)		(133)
Additional paid-in capital	18,876		18,855
Accumulated income	14,651		15,351
Accumulated other comprehensive income (loss), net:
Investment securities	(41)		(1)
Defined benefit pension and other postretirement plans	(48)		(49)
Derivative instruments	(136)		(257)
Foreign currency translation adjustments	(180)		743
Total accumulated other comprehensive income (loss), net	(405)		436
Total equity	35,989		37,589
Total liabilities and equity	$	81,808	$	82,896

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

Table of Contents

VISA INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


	Three Months Ended March 31,				Six Months Ended March 31,
	2022		2021		2022		2021
	(in millions, except per share data)






Net revenues	$	7,189	$	5,729	$	14,248	$	11,416

Operating Expenses
Personnel	1,226		1,114		2,351		2,095
Marketing	314		206		594		411
Network and processing	190		179		380		352
Professional fees	125		82		225		165
Depreciation and amortization	207		201		405		398
General and administrative	325		363		567		566
Litigation provision	—		3		148		4

Total operating expenses	2,387		2,148		4,670		3,991
Operating income	4,802		3,581		9,578		7,425

Non-operating Income (Expense)
Interest expense, net	(134)		(121)		(268)		(257)
Investment income and other	(126)		168		129		208
Total non-operating income (expense)	(260)		47		(139)		(49)
Income before income taxes	4,542		3,628		9,439		7,376
Income tax provision	895		602		1,833		1,224
Net income	$	3,647	$	3,026	$	7,606	$	6,152

Basic Earnings Per Share
Class A common stock	$	1.70	$	1.38	$	3.54	$	2.80
Class B common stock	$	2.76	$	2.24	$	5.74	$	4.55
Class C common stock	$	6.82	$	5.52	$	14.16	$	11.22

Basic Weighted-average Shares Outstanding
Class A common stock	1,654		1,695		1,662		1,695
Class B common stock	245		245		245		245
Class C common stock	10		11		10		11

Diluted Earnings Per Share
Class A common stock	$	1.70	$	1.38	$	3.54	$	2.80
Class B common stock	$	2.75	$	2.24	$	5.73	$	4.54
Class C common stock	$	6.81	$	5.52	$	14.15	$	11.20

Diluted Weighted-average Shares Outstanding
Class A common stock	2,142		2,193		2,150		2,196
Class B common stock	245		245		245		245
Class C common stock	10		11		10		11

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

Table of Contents

VISA INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)


	Three Months Ended March 31,				Six Months Ended March 31,
	2022		2021		2022		2021
	(in millions)
Net income	$	3,647	$	3,026	$	7,606	$	6,152
Other comprehensive income (loss), net of tax:
Investment securities:
Net unrealized gain (loss)	(40)		(1)		(50)		(2)
Income tax effect	8		—		10		—


Defined benefit pension and other postretirement plans:
Net unrealized actuarial gain (loss) and prior service credit (cost)	(2)		(2)		(1)		(3)
Income tax effect	—		1		—		2
Reclassification adjustments	1		3		2		6
Income tax effect	—		—		—		(1)
Derivative instruments:
Net unrealized gain (loss)	77		280		191		(17)
Income tax effect	(13)		(57)		(35)		6
Reclassification adjustments	(33)		5		(39)		(13)
Income tax effect	4		—		4		5
Foreign currency translation adjustments	(335)		(1,011)		(923)		35
Other comprehensive income (loss), net of tax	(333)		(782)		(841)		18
Comprehensive income	$	3,314	$	2,244	$	6,765	$	6,170

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

Table of Contents

VISA INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(UNAUDITED)


	Three Months Ended March 31, 2022
	Preferred Stock				Common Stock					Preferred Stock		Right to Recover for Covered Losses		Additional Paid-In Capital		Accumulated Income		Accumulated Other Comprehensive Income (Loss), Net		Total Equity
	Series A		Series B	Series C	Class A		Class B	Class C
	(in millions, except per share data)
Balance as of December 31, 2021	—	(1)	2	3	1,661		245	10		$	2,995	$	(111)	$	18,776	$	14,606	$	(72)	$	36,194
Net income																3,647				3,647
Other comprehensive income (loss), net of tax																		(333)		(333)
Comprehensive income																				3,314

VE territory covered losses incurred												(9)								(9)

Conversion of series A preferred stock upon sales into public market	—	(1)			—	(1)				(8)				8						—
Conversion of class C common stock upon sales into public market					—	(1)		—	(1)											—
Share-based compensation, net of forfeitures														190						190
Vesting of restricted stock and performance-based shares					—	(1)														—
Restricted stock and performance-based shares settled in cash for taxes					—	(1)								(3)						(3)
Cash proceeds from issuance of class A common stock under employee equity plans					2									54						54
Cash dividends declared and paid, at a quarterly amount of $0.375 per class A common stock																(802)				(802)
Repurchase of class A common stock					(15)									(149)		(2,800)				(2,949)
Balance as of March 31, 2022	—	(1)	2	3	1,648		245	10		$	2,987	$	(120)	$	18,876	$	14,651	$	(405)	$	35,989

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

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

Table of Contents

VISA INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—(Continued)

(UNAUDITED)


	Six Months Ended March 31, 2022
	Preferred Stock				Common Stock					Preferred Stock		Right to Recover for Covered Losses		Additional Paid-In Capital		Accumulated Income		Accumulated Other Comprehensive Income (Loss), Net		Total Equity
	Series A		Series B	Series C	Class A		Class B	Class C
	(in millions, except per share data)
Balance as of September 30, 2021	—	(1)	2	3	1,677		245	10		$	3,080	$	(133)	$	18,855	$	15,351	$	436	$	37,589
Net income																7,606				7,606
Other comprehensive income (loss), net of tax																		(841)		(841)
Comprehensive income																				6,765
VE territory covered losses incurred												(16)								(16)
Recovery through conversion rate adjustment										(29)		29								—
Conversion of series A preferred stock upon sales into public market	—	(1)			1					(64)				64						—
Conversion of class C common stock upon sales into public market					—	(1)		—	(1)											—
Share-based compensation, net of forfeitures														318						318
Vesting of restricted stock and performance-based shares					2															—
Restricted stock and performance-based shares settled in cash for taxes					—	(1)								(116)						(116)
Cash proceeds from issuance of class A common stock under employee equity plans					2									113						113
Cash dividends declared and paid, at a quarterly amount of $0.375 per class A common stock																(1,611)				(1,611)
Repurchase of class A common stock					(34)									(358)		(6,695)				(7,053)
Balance as of March 31, 2022	—	(1)	2	3	1,648		245	10		$	2,987	$	(120)	$	18,876	$	14,651	$	(405)	$	35,989

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

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

Table of Contents

VISA INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—(Continued)

(UNAUDITED)


	Three Months Ended March 31, 2021
	Preferred Stock				Common Stock					Preferred Stock		Right to Recover for Covered Losses		Additional Paid-In Capital		Accumulated Income		Accumulated Other Comprehensive Income (Loss), Net		Total Equity
	Series A		Series B	Series C	Class A		Class B	Class C
	(in millions, except per share data)
Balance as of December 31, 2020	—	(1)	2	3	1,696		245	11		$	3,683	$	(34)	$	18,063	$	14,813	$	1,154	$	37,679
Net income																3,026				3,026
Other comprehensive income (loss), net of tax																		(782)		(782)
Comprehensive income																				2,244

VE territory covered losses incurred												(7)								(7)

Conversion of series A preferred stock upon sales into public market	—	(1)			5					(336)				336						—
Conversion of class C common stock upon sales into public market					—	(1)		—	(1)											—
Share-based compensation, net of forfeitures														153						153
Vesting of restricted stock and performance-based shares					—	(1)														—
Restricted stock and performance-based shares settled in cash for taxes					—	(1)								(6)						(6)
Cash proceeds from issuance of class A common stock under employee equity plans					1									47						47
Cash dividends declared and paid, at a quarterly amount of $0.32 per class A common stock																(701)				(701)
Repurchase of class A common stock					(8)									(88)		(1,625)				(1,713)
Balance as of March 31, 2021	—	(1)	2	3	1,694		245	11		$	3,347	$	(41)	$	18,505	$	15,513	$	372	$	37,696

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

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

Table of Contents

VISA INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—(Continued)

(UNAUDITED)


	Six Months Ended March 31, 2021
	Preferred Stock				Common Stock					Preferred Stock		Right to Recover for Covered Losses		Additional Paid-In Capital		Accumulated Income		Accumulated Other Comprehensive Income (Loss), Net		Total Equity
	Series A		Series B	Series C	Class A		Class B	Class C
	(in millions, except per share data)
Balance as of September 30, 2020	—	(1)	2	3	1,683		245	11		$	5,086	$	(39)	$	16,721	$	14,088	$	354	$	36,210
Net income																6,152				6,152
Other comprehensive income (loss), net of tax																		18		18
Comprehensive income																				6,170
Adoption of new accounting standards																3				3
VE territory covered losses incurred												(17)								(17)
Recovery through conversion rate adjustment										(15)		15								—
Conversion of series A preferred stock upon sales into public market	—	(1)			25					(1,724)				1,724						—
Conversion of class C common stock upon sales into public market					—	(1)		—	(1)											—
Share-based compensation, net of forfeitures														275						275
Vesting of restricted stock and performance-based shares					3															—
Restricted stock and performance-based shares settled in cash for taxes					(1)									(140)						(140)
Cash proceeds from issuance of class A common stock under employee equity plans					1									108						108
Cash dividends declared and paid, at a quarterly amount of $0.32 per class A common stock																(1,404)				(1,404)
Repurchase of class A common stock					(17)									(183)		(3,326)				(3,509)
Balance as of March 31, 2021	—	(1)	2	3	1,694		245	11		$	3,347	$	(41)	$	18,505	$	15,513	$	372	$	37,696

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

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

Table of Contents

VISA INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	Six Months Ended March 31,
	2022		2021
	(in millions)
Operating Activities
Net income	$	7,606	$	6,152
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Client incentives	4,865		3,850
Share-based compensation	318		275
Depreciation and amortization of property, equipment, technology and intangible assets	405		398
Deferred income taxes	21		(27)
VE territory covered losses incurred	(16)		(17)
(Gains) losses on equity investments, net	(104)		(172)
Other	(61)		(48)
Change in operating assets and liabilities:
Settlement receivable	3		(127)
Accounts receivable	(173)		(165)
Client incentives	(4,503)		(3,262)
Other assets	(291)		(116)
Accounts payable	(75)		(41)
Settlement payable	111		210
Accrued and other liabilities	(173)		(39)
Accrued litigation	(212)		(29)
Net cash provided by (used in) operating activities	7,721		6,842
Investing Activities
Purchases of property, equipment and technology	(440)		(318)
Investment securities:
Purchases	(1,948)		(2,015)
Proceeds from maturities and sales	1,975		3,871
Acquisitions, net of cash and restricted cash acquired	(1,945)		(75)
Purchases of / contributions to other investments	(55)		(30)
Other investing activities	81		41
Net cash provided by (used in) investing activities	(2,332)		1,474
Financing Activities
Repurchase of class A common stock	(7,053)

VISA INC. [V] Filings
10-Q	[2022-04-28]
10-Q	[2022-01-28]
10-K	[2021-11-18]
10-Q	[2021-07-29]
10-Q	[2021-04-29]
10-Q	[2021-01-29]
10-K	[2020-11-19]
10-Q	[2020-07-31]
10-Q	[2020-05-04]
10-Q	[2020-01-31]
10-K	[2019-11-14]
10-Q	[2019-07-26]
10-Q	[2019-04-26]
10-Q	[2019-01-31]
10-K	[2018-11-16]
10-Q	[2018-07-27]
10-Q	[2018-04-27]
10-Q	[2018-02-01]
10-K	[2017-11-17]
10-Q	[2017-07-20]
10-Q	[2017-04-21]
10-Q	[2017-02-02]
10-K	[2016-11-15]
10-Q	[2016-07-25]
10-Q	[2016-04-25]
10-Q	[2016-01-28]
10-K	[2015-11-20]
10-Q	[2015-07-23]
10-Q	[2015-04-30]
10-Q	[2015-01-29]
10-K	[2014-11-21]
10-Q	[2014-07-24]
10-Q	[2014-04-24]
10-Q	[2014-01-30]
10-K	[2013-11-22]
10-Q	[2013-07-24]
10-Q	[2013-05-01]
10-Q	[2013-02-06]
10-K	[2012-11-16]
10-Q	[2012-07-27]
10-Q	[2012-05-02]
10-Q	[2012-02-08]