U.S. and Europe Retrospective Responsibility Plan (Tables)

3 Months Ended

Dec. 31, 2020

Retrospective Responsibility Plan [Abstract]

Changes in the U.S. litigation escrow account

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

	Three Months Ended December 31,
	2020		2019
	(in millions)
Balance at beginning of period	$	901	$	1,205
Return of takedown payment to the litigation escrow account	—		467
Payments to opt-out merchants(1) and interest earned on escrow funds	(7)		(38)
Balance at end of period	$	894	$	1,634

(1)These payments are associated with the Interchange Multidistrict Litigation. See Note 13—Legal Matters.

Changes in Preferred Stock and Right to Recover for Covered Losses

The following table sets forth the activities related to VE territory covered losses in preferred stock and “right to recover for covered losses” within stockholders’ equity during the three months ended December 31, 2020.

	Preferred Stock				Right to Recover for Covered Losses
	UK&I		Europe
	(in millions)
Balance as of September 30, 2020	$	1,106	$	1,543	$	(39)
VE territory covered losses incurred(1)	—		—		(10)
Recovery through conversion rate adjustment	(9)		(6)		15
Balance as of December 31, 2020	$	1,097	$	1,537	$	(34)

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

Preferred Stock As-Converted Value and Book Value

The following table sets forth the as-converted value of the preferred stock available to recover VE territory covered losses compared to the book value of preferred shares recorded in stockholders’ equity within the Company’s consolidated balance sheets as of December 31, 2020 and September 30, 2020:

	December 31, 2020				September 30, 2020
	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)
UK&I preferred stock	$	3,455	$	1,097	$	3,168	$	1,106
Europe preferred stock	4,732		1,537		4,331		1,543
Total	8,187		2,634		7,499		2,649
Less: right to recover for covered losses	(34)		(34)		(39)		(39)
Total recovery for covered losses available	$	8,153	$	2,600	$	7,460	$	2,610

(1)Figures in the table may not recalculate exactly due to rounding. As-converted and book values are based on unrounded numbers.

(2)The as-converted value of preferred stock is calculated as the product of: (a) 2 million and 3 million shares of the UK&I and Europe preferred stock outstanding, respectively, as of December 31, 2020; (b) 6.368 and 6.853, the class A common stock conversion rate applicable to the UK&I and Europe preferred stock as of December 31, 2020, respectively; and (c) $218.73, Visa’s class A common stock closing stock price as of December 31, 2020.

(3)The as-converted value of preferred stock is calculated as the product of: (a) 2 million and 3 million shares of the UK&I and Europe preferred stock outstanding, respectively, as of September 30, 2020; (b) 6.387 and 6.861, the class A common stock conversion rate applicable to the UK&I and Europe preferred stock as of September 30, 2020, respectively; and (c) $199.97, Visa’s class A common stock closing stock price as of September 30, 2020.