This management's discussion and analysis provides a review of the results of operations, financial condition and the liquidity and capital resources ofVisa Inc. and its subsidiaries ("Visa ," "we," "us," "our" or the "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 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 theU.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 invasion ofUkraine byRussia ; the ongoing effects of the COVID-19 pandemic, as well as the reopening of borders and resumption of international travel; prospects, developments, strategies and growth of our business; 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 "anticipates," "believes," "estimates," "expects," "intends," "may," "projects," "could," "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 ourSEC filings, including our Annual Report on Form 10-K, for the year endedSeptember 30, 2021 , and our 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. 27
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Overview
Visa is a global payments technology company that facilitates global commerce and money movement across more than 200 countries and territories among a global network of consumers, merchants, financial institutions and government entities through innovative technologies. We provide transaction processing services (primarily authorization, clearing and settlement) to our financial institutions and merchants 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
Three Months Ended Six Months Ended March 31, March 31, % % 2022 2021 Change(1) 2022 2021 Change(1) (in millions, except percentages and per share data) Net revenues$ 7,189 $ 5,729 25 %$ 14,248 $ 11,416 25 % Operating expenses$ 2,387 $ 2,148 11 %$ 4,670 $ 3,991 17 % Net income$ 3,647 $ 3,026 21 %$ 7,606 $ 6,152 24 % Diluted earnings per share$ 1.70 $ 1.38 23 %$ 3.54 $ 2.80 26 % Non-GAAP operating expenses(2)$ 2,287 $ 1,978 16 %$ 4,402 $ 3,806 16 % Non-GAAP net income(2)$ 3,836 $ 3,031 27 %$ 7,737 $ 6,156 26 % Non-GAAP diluted earnings per share(2)$ 1.79 $ 1.38 30 %$ 3.60 $ 2.80 28 %
(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 GAAP to non-GAAP financial results, see tables in Non-GAAP financial results below.
Russia &Ukraine . During the quarter endedMarch 31, 2022 , economic sanctions were imposed onRussia by theU.S. ,European Union ,United Kingdom and other jurisdictions and authorities, impactingVisa and its clients. We announced inMarch 2022 that we were suspending our operations inRussia . As a result, we are no longer generating revenue from domestic and cross-border activities related toRussia . Since 2015, domestic transactions have been processed byRussia's state-owned payments operator, National Payment Card System. With respect to cross-border activities, all transactions initiated withVisa cards issued by financial institutions outsideRussia no longer work withinRussia , and all transactions on cards issued inRussia no longer work outside the country. Furthermore, we have deconsolidated our Russian subsidiary, as required underU.S. GAAP. For the first half of fiscal 2022 and full year fiscal 2021, total net revenues fromRussia , including revenues driven by domestic as well as cross-border activities, were approximately 4% of our consolidated net revenues.
With respect to
COVID-19. As the effects of the evolving COVID-19 pandemic continue, our priority remains the safety of our employees, clients and the communities in which we live and operate. We are taking a phased approach to reopening our offices, with ourU.S. employees returning to offices inApril 2022 in a new hybrid model of flexible work. The ongoing effects ofRussia's invasion ofUkraine and COVID-19 are difficult to predict due to numerous uncertainties identified in Part II, Item 1A "Risk Factors" in this Form 10-Q. We will continue to evaluate the nature and extent of the impact to our business. Highlights for the first half of fiscal 2022. For the three and six months endedMarch 31, 2022 , net revenues increased 25% over both the prior-year comparable periods, primarily due to the growth in nominal payments volume, processed transactions and nominal cross-border volume, partially offset by higher client incentives. Net revenues were also positively impacted by our suspension of operations inRussia . See Results of Operations-Net Revenues below for further discussion. During the three and six months endedMarch 31, 2022 , exchange rate 28
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movements and our hedging program negatively impacted our net revenues growth by approximately one percentage point.
For the three and six months endedMarch 31, 2022 , GAAP operating expenses increased 11% and 17% over the prior-year comparable periods, respectively, primarily driven by higher personnel expense reflecting our strategy to invest in future growth and expenses incurred as a result of steps taken to support our employees inRussia andUkraine , and higher marketing expense as we lapped planned delays in spending in the prior year. For the six months endedMarch 31, 2022 , GAAP operating expenses also included higher litigation provision. During the three and six months endedMarch 31, 2022 , exchange rate movements positively impacted our operating expense growth by approximately three percentage points and two percentage points, respectively. For the three and six months endedMarch 31, 2022 , non-GAAP operating expenses increased 16% over both the prior-year comparable periods, primarily due to higher marketing expense as we lapped planned delays in spending in the prior year, higher personnel expense reflecting our strategy to invest in future growth and higher general and administrative expense related to the suspension of our operations inRussia and higher usage of travel related card benefits. Acquisitions. OnDecember 20, 2021 , we acquiredThe Currency Cloud Group Limited ("Currencycloud"), aUK -based global platform that enables banks and fintechs to provide innovative foreign exchange solutions for cross-border payments, for a total purchase consideration of$893 million (which includes the fair value of our previously held equity interest in Currencycloud). OnMarch 10, 2022 , we acquired 100% of the share capital ofTink AB ("Tink") for$1.9 billion in cash. Tink is a European open banking platform that enables financial institutions, fintechs and merchants to build financial products and services and move money. See Note 2-Acquisitions to our unaudited consolidated financial statements. Interchange multidistrict litigation. During the six months endedMarch 31, 2022 , we recorded an additional accrual of$145 million to address claims associated with the interchange multidistrict litigation. We also deposited$250 million into theU.S. litigation escrow account. See Note 5-U.S. andEurope Retrospective Responsibility Plans and Note 13-Legal Matters to our unaudited consolidated financial statements. Common stock repurchases. InDecember 2021 , our board of directors authorized a$12.0 billion share repurchase program. During the six months endedMarch 31, 2022 , we repurchased 34 million shares of our class A common stock in the open market for$7.1 billion . As ofMarch 31, 2022 , our repurchase program had remaining authorized funds of$9.8 billion . See Note 9-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. •Gains 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 the companies that we invest in and 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 29
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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 six months endedMarch 31, 2022 , we recorded an additional accrual to address claims associated with the interchange multidistrict litigation of$145 million , and related tax benefit of$32 million determined by applying applicable tax rates. Under theU.S. retrospective responsibility plan, we recover the monetary liabilities related to theU.S. covered litigation through a downward adjustment to the conversion rate of our class B common stock to shares of class A common stock. See Note 5-U.S. and Europe Retrospective Responsibility Plans and Note 13-Legal Matters to our unaudited consolidated financial statements. •Russia-Ukraine charges. During the three and six months endedMarch 31, 2022 , we recorded a loss within general and administrative expense of$35 million from the deconsolidation of our Russian subsidiary. See Note 1-Summary of Significant Accounting Policies to our unaudited consolidated financial statements. We also incurred charges of$25 million in personnel expense as a result of steps taken to support our employees inRussia andUkraine . We have excluded these amounts and the related tax benefit of$4 million , determined by applying applicable tax rates, as they are one-time charges and do not reflect the underlying performance of our business. •Indirect taxes. During the three and six months endedMarch 31, 2021 , we recognized a one-time charge within general and administrative expense of$152 million , and related tax benefit of$40 million determined by applying applicable tax rates. This charge is to record our estimate of probable additional indirect taxes, related to prior periods, for which we could be liable as a result of certain changes in applicable law. This one-time charge is not representative of our ongoing operations. Non-GAAP operating expenses, non-operating income (expense), income tax provision, effective income tax rate, net income and diluted earnings per share should not be relied upon as substitutes for, or considered in isolation from, measures calculated in accordance withU.S. GAAP. The following tables reconcile our as-reported financial measures, calculated in accordance withU.S. GAAP, to our respective non-GAAP financial measures:
Three Months Ended
Diluted Operating Non-operating Income Tax Effective Income Net Earnings Per Expenses Income (Expense) Provision Tax Rate(1) Income Share(1) (in millions, except percentages and per share data) As reported$ 2,387 $ (260)$ 895 19.7 %$ 3,647 $ 1.70 (Gains) losses on equity investments, net - 127 28 99 0.05 Amortization of acquired intangible assets (20) - 4 16 0.01 Acquisition-related costs (20) - 2 18 0.01 Russia-Ukraine charges (60) - 4 56 0.03 Non-GAAP$ 2,287 $ (133)$ 933 19.6 %$ 3,836 $ 1.79 30
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Six Months Ended
Diluted Operating Non-operating Income Tax Effective Income Net Earnings Per Expenses Income (Expense) Provision Tax Rate(1) Income Share(1) (in millions, except percentages and per share data) As reported$ 4,670 $ (139)$ 1,833 19.4 %$ 7,606 $ 3.54 (Gains) losses on equity investments, net - (104) (14) (90) (0.04) Amortization of acquired intangible assets (33) - 7 26 0.01 Acquisition-related costs (30) - 4 26 0.01 Litigation provision (145) - 32 113 0.05 Russia-Ukraine charges (60) - 4 56 0.03 Non-GAAP$ 4,402 $ (243)$ 1,866 19.4 %$ 7,737 $ 3.60
Three Months Ended
Diluted Operating Non-operating Income Tax Effective Income Net Earnings Per Expenses Income (Expense) Provision Tax Rate(1) Income Share(1) (in millions, except percentages and per share data) As reported$ 2,148 $ 47$ 602 16.6 %$ 3,026 $ 1.38 (Gains) losses on equity investments, net - (156) (35) (121) (0.05) Amortization of acquired intangible assets (13) - 3 10 - Acquisition-related costs (5) - 1 4 - Indirect taxes (152) - 40 112 0.05 Non-GAAP$ 1,978 $ (109)$ 611 16.8 %$ 3,031 $ 1.38
Six Months Ended
Diluted Operating Non-operating Income Tax Effective Income Net Earnings Per Expenses Income (Expense) Provision Tax Rate(1) Income Share(1) (in millions, except percentages and per share data) As reported$ 3,991 $ (49)$ 1,224 16.6 %$ 6,152 $ 2.80 (Gains) losses on equity investments, net - (172) (39) (133) (0.06) Amortization of acquired intangible assets (25) - 6 19 0.01 Acquisition-related costs (8) - 2 6 - Indirect taxes (152) - 40 112 0.05 Non-GAAP$ 3,806 $ (221)$ 1,233 16.7 %$ 6,156 $ 2.80
(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 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.
Payments volume represents the aggregate dollar amount of purchases made with cards and other form factors carrying theVisa , Visa Electron, V PAY and Interlink brands and excludesEurope co-badged volume. Nominal payments volume is denominated inU.S. dollars and is calculated each quarter by applying an establishedU.S. dollar/foreign currency exchange rate for each local currency in which our volumes are reported. Processed transactions represent transactions using cards and other form factors carrying theVisa , Visa Electron, V PAY, Interlink and PLUS brands processed onVisa's networks. 31
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The following table presents nominal payments and cash volume:
U.S. International Visa Inc. Three Months Ended December 31,(1) Three Months Ended December 31,(1)
Three Months Ended December 31,(1)
2021 2020 % Change(2) 2021 2020 % Change(2) 2021 2020 % Change(2) (in billions, except percentages)
Nominal payments volume Consumer credit$ 525 $ 414 27 %$ 707 $ 620 14 %$ 1,232 $ 1,034 19 % Consumer debit(3) 651 556 17 % 733 613 20 % 1,384 1,169 18 % Commercial(4) 218 171 28 % 128 103 25 % 347 273 27 % Total nominal payments volume(2)$ 1,394 $ 1,140 22 %$ 1,568 $ 1,336 17 %$ 2,963 $ 2,476 20 % Cash volume(5) 153 143 7 % 514 497 3 % 667 640 4 % Total nominal volume(2),(6)$ 1,547 $ 1,283 21 %$ 2,083 $ 1,833 14 %$ 3,630 $ 3,116 16 % U.S. International Visa Inc. Six Months Ended December 31,(1) Six Months Ended December 31,(1)
Six Months Ended December 31,(1)
2021 2020 % Change(2) 2021 2020 % Change(2) 2021 2020 % Change(2) (in billions, except percentages)
Nominal payments volume Consumer credit$ 1,004 $ 791 27 %$ 1,359 $ 1,194 14 %$ 2,363 $ 1,985 19 % Consumer debit(3) 1,291 1,111 16 % 1,424 1,198 19 % 2,715 2,309 18 % Commercial(4) 423 334 27 % 246 197 25 % 669 531 26 % Total nominal payments volume(2)$ 2,719 $ 2,237 22 %$ 3,028 $ 2,589 17 %$ 5,747 $ 4,825 19 % Cash volume(5) 332 308 8 % 1,011 979 3 % 1,342 1,287 4 % Total nominal volume(2),(6)$ 3,050 $ 2,545 20 %$ 4,039 $ 3,567 13 %$ 7,089 $ 6,112 16 % The following table presents the change in nominal and constant payments and cash volume: InternationalVisa Inc. InternationalVisa Inc. Three Months Three Months Six Months Six Months EndedDecember 31 , EndedDecember 31 , EndedDecember 31 , EndedDecember 31, 2021 vs. 2020(1),(2) 2021 vs. 2020(1),(2) 2021 vs. 2020(1),(2) 2021 vs. 2020(1),(2) Nominal Constant(7) Nominal Constant(7) Nominal Constant(7) Nominal Constant(7) Payments volume growth Consumer credit growth 14 % 16 % 19 % 20 % 14 % 14 % 19 % 19 % Consumer debit growth(3) 20 % 20 % 18 % 19 % 19 % 17 % 18 % 17 % Commercial growth(4) 25 % 28 % 27 % 28 % 25 % 24 % 26 % 26 % Total payments volume growth 17 % 19 % 20 % 20 % 17 % 16 % 19 % 19 % Cash volume growth(5) 3 % 7 % 4 % 7 % 3 % 5 % 4 % 6 % Total volume growth 14 % 15 % 16 % 18 % 13 % 13 % 16 % 16 % (1)Service revenues in a given quarter are assessed based on nominal payments volume in the prior quarter. Therefore, service revenues reported for the three and six months endedMarch 31, 2022 and 2021, respectively, were based on nominal payments volume reported by our financial institution clients for the three and six months endedDecember 31, 2021 and 2020, 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. (3)Includes consumer prepaid volume and Interlink volume. (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 byVisa . (7)Growth on a constant-dollar basis excludes the impact of foreign currency fluctuations against theU.S. dollar. 32
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The following table presents the number of processed transactions:
Three Months Ended Six Months Ended March 31, March 31, % % 2022 2021 Change(1) 2022 2021 Change(1) (in millions, except percentages) Visa processed transactions 44,807 37,644 19 % 92,366 76,857 20 %
(1)Figures in the table may not recalculate exactly due to rounding. Percentage change is calculated based on unrounded numbers. On occasion, previously presented information may be updated. Prior period updates are not material.
Results of OperationsNet Revenues The following table presents our net revenues earned in theU.S. and internationally: Three Months Ended Six Months Ended March 31, March 31, % % 2022 2021 Change(1) 2022 2021 Change(1) (in millions, except percentages) U.S.$ 3,079 $ 2,683 15 %$ 6,257 $ 5,350 17 % International 4,110 3,046 35 % 7,991 6,066 32 % Net revenues$ 7,189 $ 5,729 25 %$ 14,248 $ 11,416 25 %
(1)Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.
Net revenues increased during the three and six-month comparable periods primarily due to the growth in nominal payments volume, processed transactions and nominal cross-border volume, partially offset by higher client incentives. Net revenues were also positively impacted by our suspension of operations inRussia . See further discussion below. Our net revenues are impacted by the overall strengthening or weakening of theU.S. dollar as payments volume and related revenues denominated in local currencies are converted toU.S. dollars. During the three and six months endedMarch 31, 2022 , exchange rate movements and our hedging program negatively impacted our net revenues growth by approximately one percentage point.
The following table presents the components of our net revenues:
Three Months Ended Six Months Ended March 31, March 31, % % 2022 2021 Change(1) 2022 2021 Change(1) (in millions, except percentages) Service revenues$ 3,521 $ 2,845 24 %$ 6,714 $ 5,522 22 % Data processing revenues 3,480 2,996 16 % 7,094 6,029 18 % International transaction revenues 2,208 1,488 48 % 4,382 2,939 49 % Other revenues 474 392 21 % 923 776 19 % Client incentives (2,494) (1,992) 25 % (4,865) (3,850) 26 % Net revenues$ 7,189 $ 5,729 25 %$ 14,248 $ 11,416 25 %
(1)Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.
•Service revenues increased primarily due to 20% and 19% growth in nominal payments volume during the three and six-month comparable periods, respectively. In addition, while we normally would have recognized revenues in fiscal third quarter based on fiscal second quarter payments volume, as a result of the suspension of our operations inRussia , this quarter we recognized revenues from our Russian clients based on fiscal second quarter payments volume. 33
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•Data processing revenues increased primarily due to overall growth in processed transactions of 19% and 20% during the three and six-month comparable periods, respectively, partially offset by unfavorable business mix. •International transaction revenues increased primarily due to growth in nominal cross-border volumes, excluding transactions withinEurope , of 42% and 45% during the three and six-month comparable periods, respectively. International transaction revenues also increased due to select pricing modifications and fluctuations in the volatility of a broad range of currencies, partially offset by business mix.
•Other revenues increased primarily due to higher consulting and marketing revenues and other value added services.
•Client incentives increased primarily due to growth in payments volume during the three and six-month comparable periods. 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 execution of new contracts. Operating Expenses The following table presents the components of our total operating expenses: Three Months Ended Six Months Ended March 31, March 31, % % 2022 2021 Change(1) 2022 2021 Change(1) (in millions, except percentages) Personnel$ 1,226 $ 1,114 10 %$ 2,351 $ 2,095 12 % Marketing 314 206 53 % 594 411 45 % Network and processing 190 179 7 % 380 352 8 % Professional fees 125 82 53 % 225 165 36 % Depreciation and amortization 207 201 3 % 405 398 2 % General and administrative 325 363 (10 %) 567 566 - % Litigation provision - 3 NM 148 4 NM Total operating expenses$ 2,387 $ 2,148 11 %$ 4,670 $ 3,991
17 %
NM - Not meaningful (1)Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers. Total operating expenses increased primarily due to the planned delay of our spend as revenue was impacted by the COVID-19 pandemic in the first half of the prior year. Total operating expenses were also impacted byRussia's invasion ofUkraine .
•Personnel expenses increased primarily due to higher headcount and
compensation, reflecting our strategy to invest in future growth, and expenses
incurred as a result of steps taken to support our employees in
•Marketing expenses increased as we lapped planned delays in spending in the
prior year as well as higher spending in various campaigns, including the
•Network and processing expenses increased mainly due to higher continued technology and processing network investments to support growth.
•Professional fees increased primarily due to higher consulting fees as we lapped planned delays in spending in the prior year.
•General and administrative expenses decreased and was approximately flat during the three and six months endedMarch 31, 2022 , respectively, primarily due to a one-time charge of indirect taxes in the prior year, partially offset by increases in expenses due to the suspension of our operations inRussia , deconsolidation of our Russian subsidiary and higher usage of travel related card benefits. 34
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•Litigation provision increased during the six months endedMarch 31, 2022 primarily due to an additional$145 million accrual related to theU.S. covered litigation. See Note 5-U.S. and Europe Retrospective Responsibility Plans and Note 13-Legal Matters to our unaudited consolidated financial statements.
Non-operating Income (Expense)
The following table presents the components of our non-operating income (expense): Three Months Ended Six Months Ended March 31, March 31, % % 2022 2021 Change(1) 2022 2021 Change(1) (in millions, except percentages) Interest expense, net$ (134) $ (121) 10 %$ (268) $ (257) 4 % Investment income and other (126) 168 (174 %) 129 208 (38 %) Total non-operating income (expense)$ (260) $ 47 (644 %)$ (139) $ (49)
185 %
(1)Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.
•Interest expense, net increased in the three and six months endedMarch 31, 2022 primarily as a result of higher interest expense related to income taxes liabilities. The increase in the six months endedMarch 31, 2022 was partially offset by lower interest expense due to lower outstanding debt and derivative instruments that lowered the cost of borrowing. •Investment income and other decreased in the three months endedMarch 31, 2022 primarily due to losses on our equity investments. Investment income and other decreased in the six months endedMarch 31, 2022 primarily due to lower gains on our equity investments. Effective Income Tax Rate
The following table presents our effective income tax rates:
Three Months Ended Six Months Ended March 31, March 31, 2022 2021 2022 2021 Effective income tax rate 20 % 17 % 19 % 17 % The difference in the effective tax rates is primarily due to$66 million and$147 million of tax benefits recognized during the three and six months endedMarch 31, 2021 , respectively, as a result of the conclusion of audits by taxing authorities. 35
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Liquidity and Capital Resources
Cash Flow Data
The following table summarizes our cash flow activity for the periods presented: Six Months Ended March 31, 2022 2021 (in millions) Total cash provided by (used in): Operating activities$ 7,721 $ 6,842 Investing activities (2,332) 1,474 Financing activities (8,367) (7,945)
Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents
(305) 16
Increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents
$
(3,283)
Operating activities. Cash provided by operating activities for the six months endedMarch 31, 2022 was higher than the prior-year comparable period primarily due to growth in our underlying business, partially offset by higher client incentive payments. Investing activities. Cash was used in investing activities for the six months endedMarch 31, 2022 as compared to cash provided by investing activities during the prior-year comparable period, primarily due to higher cash paid for acquisitions, net of cash and restricted cash acquired, and lower proceeds from sales and maturities, net of purchases of investment securities. See Note 2-Acquisitions and Note 4-Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents to our unaudited consolidated financial statements. Financing activities. Cash used in financing activities for the six months endedMarch 31, 2022 was higher than the prior-year comparable period primarily due to higher share repurchases and higher dividends paid, partially offset by the absence of the principal debt payment made in the prior year and proceeds from the issuance of commercial paper in the current year. See Note 7-Debt and Note 9-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 investment securities based upon our funding requirements, access to liquidity from these holdings and the returns that these holdings provide. 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. Commercial paper program. We maintain a commercial paper program to support our working capital requirements and for other general corporate purposes. The carrying amount outstanding atMarch 31, 2022 of$300 million was fully repaid inApril 2022 . See Note 7-Debt to our unaudited consolidated financial statements.
Uses of Liquidity
There has been no significant change to our primary uses of liquidity since
Common stock repurchases. During the six months ended
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Dividends. During the six months endedMarch 31, 2022 , we declared and paid$1.6 billion in dividends to holders of our common and preferred stock. OnApril 22, 2022 , our board of directors declared a cash dividend in the amount of$0.375 per share of class A common stock (determined in the case of class B and C common stock and series A, B and C convertible participating preferred stock on an as-converted basis). See Note 9-Stockholders' Equity to our unaudited consolidated financial statements. We expect to continue paying quarterly dividends in cash, subject to approval by the board of directors. All preferred and class B and C common stock will share ratably on an as-converted basis in such future dividends. Senior notes. Principal payments on our fixed-rate senior notes of$1.0 billion and$2.3 billion are due inSeptember 2022 andDecember 2022 , respectively, for which we have sufficient liquidity. See Note 7-Debt to our unaudited consolidated financial statements. Litigation. DuringDecember 2021 , we deposited$250 million into theU.S. litigation escrow account to address claims associated with the interchange multidistrict litigation. The balance of this account as ofMarch 31, 2022 was$882 million and is reflected as restricted cash in our consolidated balance sheets. See Note 5-U.S. and Europe Retrospective Responsibility Plans and Note 13-Legal Matters to our unaudited consolidated financial statements. Acquisitions. OnDecember 20, 2021 , we acquired Currencycloud for a total purchase consideration of$893 million (which includes the fair value of our previously held equity interest in Currencycloud), and onMarch 10, 2022 , we acquired 100% of the share capital of Tink for$1.9 billion in cash. See Note 2-Acquisitions to our unaudited consolidated financial statements.
Accounting Pronouncements Not Yet Adopted
InMarch 2020 , theFinancial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-04, which provides optional expedients and exceptions for applyingU.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 an amendment to this standard. The amendments in the ASU are effective upon issuance throughDecember 31, 2022 . We are evaluating the effect ASU 2020-04 and its subsequent amendment will have on our consolidated financial statements. The adoption is not expected to have a material impact on our consolidated financial statements.
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