V
$108.30
Visa
($.36)
(.33%)
Earnings Details
3rd Quarter June 2017
Thursday, July 20, 2017 4:05:05 PM
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Summary

Visa Beats

Visa (V) reported 3rd Quarter June 2017 earnings of $0.86 per share on revenue of $4.6 billion. The consensus earnings estimate was $0.80 per share on revenue of $4.4 billion. The Earnings Whisper number was $0.84 per share. Revenue grew 25.8% on a year-over-year basis.

The company said it now expects fiscal 2017 revenue of approximately $18.10 billion. The company previously said it expected revenue to be at the high-end of its earlier guidance range of $17.49 billion to $17.79 billion and the current consensus estimate is revenue of $17.87 billion for the year ending September 30, 2017.

Visa Inc is a payments technology company that connects consumers, businesses, banks and governments in more than 200 countries and territories to fast, secure and reliable electronic payments.

Results
Reported Earnings
$0.86
Earnings Whisper
$0.84
Consensus Estimate
$0.80
Reported Revenue
$4.57 Bil
Revenue Estimate
$4.36 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Visa Inc. Reports Strong Fiscal Third Quarter 2017 Results

Visa Inc. (V) today announced financial results for the Company’s fiscal third quarter 2017, ended June 30, 2017.

Fiscal Third Quarter 2017 Key Highlights:

-- GAAP net income of $2.1 billion or $0.86 per share

Net operating revenue of $4.6 billion, an increase of 26%, driven by inclusion of Europe and continued growth in payments volume, cross-border volume and processed transactions

Payments volume growth, on a constant dollar basis, was 38% over the prior year at $1.9 trillion

Cross-border volume growth, on a constant dollar basis, was 147% or 11% inclusive of Europe in prior year results

Total Visa processed transactions were 28.5 billion, a 44% increase over the prior year, or 13% growth inclusive of Europe in prior year results

Returned approximately $2.1 billion of capital to shareholders in the form of share repurchases and dividends

"I’m pleased to report Visa’s fiscal third quarter results which reflect strong growth in payments volume, cross-border volume, and processed transactions, which were powered by economic tailwinds in the U.S. and globally," said Alfred F. Kelly, Jr., Chief Executive Officer of Visa Inc. "Our results and growth are a reflection of our strategy to pursue the conversion of cash and checks to electronic payments in partnership with our clients around the world."

Fiscal Third Quarter 2017 Financial Highlights:

GAAP net income in the fiscal third quarter was $2.1 billion or $0.86 per share. Prior year’s results included several special items related to the acquisition of Visa Europe. Excluding these special items, net income and earnings per share both increased 26% over the prior year. Exchange rate shifts versus the prior year negatively impacted earnings per share growth by approximately 2 percentage points. All references to earnings per share assume fully-diluted class A share count, inclusive of series B and C convertible participating preferred stock, unless otherwise noted.

Net operating revenue in the fiscal third quarter was $4.6 billion, an increase of 26%, driven by the inclusion of Europe and continued growth in payments volume, cross-border volume and processed transactions. Exchange rate shifts versus the prior year negatively impacted reported net operating revenue growth by approximately 1.5 percentage points.

Payments volume growth, on a constant dollar basis, for the three months ended March 31, 2017, on which fiscal third quarter service revenue is recognized, was 38% over the prior year at $1.7 trillion. Effective with the three months ended December 31, 2016, Europe co-badge volume is no longer included in reported volume.

Payments volume growth, on a constant dollar basis, for the three months ended June 30, 2017, was 38% over the prior year at $1.9 trillion.

Cross-border volume growth, on a constant dollar basis, was 147% for the three months ended June 30, 2017. Cross-border volume growth, on a constant dollar basis and inclusive of Europe in prior year results, was 11%.

Total processed transactions, which represent transactions processed by Visa, for the three months ended June 30, 2017, were 28.5 billion, a 44% increase over the prior year. Total processed transactions growth was 13%, inclusive of Europe in prior year results.

Fiscal third quarter service revenues were $1.9 billion, an increase of 19% over the prior year, and are recognized based on payments volume in the prior quarter. All other revenue categories are recognized based on current quarter activity. Data processing revenues rose 29% over the prior year to $2.0 billion. International transaction revenues grew 45% over the prior year to $1.6 billion. Other revenues were $209 million, flat over the prior year. Client incentives, which are a contra revenue item, were $1.1 billion and represent 20.1% of gross revenues.

GAAP operating expenses were $1.5 billion for the fiscal third quarter, a 52% decrease over the prior year’s results which included special items related to the acquisition of Visa Europe. Excluding these special items, operating expenses grew 31% over the prior year, primarily driven from the inclusion of Visa Europe’s operating expenses following the acquisition.

GAAP effective income tax rate was 29.3% for the quarter ended June 30, 2017.

Cash, cash equivalents, and available-for-sale investment securities were $12.2 billion at June 30, 2017.

The weighted-average number of diluted shares of class A common stock outstanding was 2.39 billion for the quarter ended June 30, 2017.

Notable Events:

During the three months ended June 30, 2017, the Company repurchased 17.8 million shares of class A common stock, at an average price of $93.82 per share, using $1.7 billion of cash on hand. In the nine months ended June 30, 2017, the Company repurchased a total of 59.2 million shares of class A common stock, at an average price of $86.82 per share, using $5.1 billion of cash on hand. The Company currently has $5.5 billion of funds available for share repurchase.

On July 17, 2017, the board of directors declared a quarterly cash dividend of $0.165 per share of class A common stock (determined in the case of class B and C common stock and series B and C convertible participating preferred stock on an as-converted basis) payable on September 5, 2017, to all holders of record of the Company’s common and preferred stock as of August 18, 2017.

Financial Outlook for Fiscal Full-Year 2017:

Visa Inc. reaffirms its financial outlook for the following GAAP metrics for fiscal full-year 2017:

-- Annual operating margin: Mid 60s; and

Effective tax rate: Mid 40s on a GAAP basis and approximately 30% on an adjusted, non-GAAP basis.

Visa Inc. updates its financial outlook for the following GAAP metrics for fiscal full-year 2017:

Annual net revenue growth: Approximately 20% on a nominal dollar basis, including approximately 2.0 ppts of negative foreign currency impact;

Client incentives as a percent of gross revenues: 20.0% to 20.5% range; and

Annual diluted class A common stock earnings per share growth: Low double-digits on a GAAP nominal dollar basis and approximately 20% on an adjusted, non-GAAP nominal dollar basis (see note below), both including approximately 2.5 ppts of negative foreign currency impact.

Note: The financial outlook for fiscal full-year 2017 includes Visa Europe integration expenses of approximately $60 million for the full-year. Differences in our financial outlook for fiscal full-year 2017 GAAP and non-GAAP financial measures relate to the one-time, non-recurring items that are included in the accompanying reconciliation. Annual adjusted diluted class A common stock earnings per share growth is derived from adjusted full-year 2016 earnings per share results of $2.84. Refer to the accompanying financial tables for further details and a reconciliation of the adjusted fiscal full-year 2016 results.

Fiscal Third Quarter 2017 Earnings Results Conference Call Details:

Visa’s executive management team will host a live audio webcast beginning at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) today to discuss the financial results and business highlights. All interested parties are invited to listen to the live webcast at http://investor.visa.com. A replay of the webcast will be available on the Visa Investor Relations website for 30 days. Investor information, including supplemental financial information, is available on Visa Inc.’s Investor Relations website at http://investor.visa.com.

About Visa Inc.

Visa Inc. (V) is a global payments technology company that connects consumers, businesses, financial institutions, and governments in more than 200 countries and territories to fast, secure and reliable electronic payments. We operate one of the world’s most advanced processing networks - VisaNet - that is capable of handling more than 65,000 transaction messages a second, with fraud protection for consumers and assured payment for merchants. Visa is not a bank and does not issue cards, extend credit or set rates and fees for consumers. Visa’s innovations, however, enable its financial institution customers to offer consumers more choices: pay now with debit, pay ahead with prepaid or pay later with credit products. For more information, visit visa.com/aboutvisa, visacorporate.tumblr.com and @VisaNews.

Forward-Looking Statements:

This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 that relate to, among other things, our future operations, prospects, developments, strategies, business growth and financial outlook for fiscal full-year 2017. Forward-looking statements generally are identified by words such as "believes," "estimates," "expects," "intends," "may," "projects," "outlook", "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.

Actual results could differ materially from those expressed in, or implied by, our forward-looking statements due to a variety of factors, including, but not limited to:

increased oversight and regulation of the global payments industry and our business;

-- impact of government-imposed restrictions on payment systems;

-- outcome of tax and litigation matters;

increasingly intense competition in the payments industry, including competition for our clients and merchants;

proliferation and continuous evolution of new technologies and business models;

our ability to maintain relationships with our clients, merchants and other third parties;

-- brand or reputational damage;

-- management changes;

impact of global economic, political, market and social events or conditions;

-- exposure to loss or illiquidity due to settlement guarantees;

uncertainty surrounding the impact of the United Kingdom’s withdrawal from the European Union;

-- cyber security attacks, breaches or failure of our networks;

-- failure to maintain interoperability with Visa Europe’s systems;

our ability to successfully integrate and manage our acquisitions and other strategic investments; and

other factors described in our filings with the U.S. Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended September 30, 2016, 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.

VISA INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
June 30,
September 30,
2017
2016
(in millions, except par value data)
Assets
Cash and cash equivalents
$
7,437
$
5,619
Restricted cash--U.S. litigation escrow
1,030
1,027
Investment securities:
Trading
80
71
Available-for-sale
2,674
3,248
Settlement receivable
1,419
1,467
Accounts receivable
1,105
1,041
Customer collateral
1,075
1,001
Current portion of client incentives
308
284
Prepaid expenses and other current assets
590
555
Total current assets
15,718
14,313
Investment securities, available-for-sale
2,117
3,931
Client incentives
553
448
Property, equipment and technology, net
2,202
2,150
Other assets
1,079
893
Intangible assets, net
27,322
27,234
Goodwill
15,009
15,066
Total assets
$
64,000
$
64,035
Liabilities
Accounts payable
$
130
$
203
Settlement payable
2,075
2,084
Customer collateral
1,075
1,001
Accrued compensation and benefits
638
673
Client incentives
1,909
1,976
Accrued liabilities
940
1,128
Current maturities of long-term debt
1,749
--
Accrued litigation
995
981
Total current liabilities
9,511
8,046
Long-term debt
14,142
15,882
Deferred tax liabilities
5,888
4,808
Deferred purchase consideration
1,258
1,225
Other liabilities
1,257
1,162
Total liabilities
32,056
31,123
Equity
Preferred stock, $0.0001 par value, 25 shares authorized and 5
shares issued and outstanding as follows:
Series A convertible participating preferred stock, none issued
--
--
Series B convertible participating preferred stock, 2 shares issued
2,326
2,516
and outstanding at June 30, 2017 and September 30, 2016
Series C convertible participating preferred stock, 3 shares issued
3,200
3,201
and outstanding at June 30, 2017 and September 30, 2016
Class A common stock, $0.0001 par value, 2,001,622 shares
--
--
authorized, 1,832 and 1,871 shares issued and outstanding at June
30, 2017 and September 30, 2016, respectively
Class B common stock, $0.0001 par value, 622 shares authorized, 245
--
--
shares issued and outstanding at June 30, 2017 and September 30, 2016
Class C common stock, $0.0001 par value, 1,097 shares authorized, 13
--
--
and 17 shares issued and outstanding at June 30, 2017 and September
30, 2016, respectively
Treasury stock
--
(170 )
Right to recover for covered losses
(8 )
(34 )
Additional paid-in capital
17,009
17,395
Accumulated income
9,299
10,462
Accumulated other comprehensive income (loss), net:
Investment securities, available-for-sale
58
36
Defined benefit pension and other postretirement plans
(207 )
(225 )
Derivative instruments classified as cash flow hedges
(15 )
(50 )
Foreign currency translation adjustments
282
(219 )
Total accumulated other comprehensive income (loss), net
118
(458 )
Total equity
31,944
32,912
Total liabilities and equity
$
64,000
$
64,035
VISA INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended
Nine Months Ended
June 30,
June 30,
2017
2016(1)
2017
2016(1)
(in millions, except per share data)
Operating Revenues
Service revenues
$
1,948
$
1,635
$
5,859
$
4,979
Data processing revenues
1,984
1,541
5,719
4,493
International transaction revenues
1,571
1,084
4,529
3,160
Other revenues
209
209
615
605
Client incentives
(1,147 )
(839 )
(3,219 )
(2,416 )
Net operating revenues
4,565
3,630
13,503
10,821
Operating Expenses
Personnel
698
509
1,973
1,536
Marketing
221
189
632
569
Network and processing
158
123
453
377
Professional fees
102
138
265
276
Depreciation and amortization
132
120
409
361
General and administrative
230
246
822
566
Litigation provision
--
--
17
1
Visa Europe Framework Agreement loss
--
1,877
--
1,877
Total operating expenses
1,541
3,202
4,571
5,563
Operating income
3,024
428
8,932
5,258
Non-operating (Expense) Income
Interest expense
(140 )
(131 )
(415 )
(292 )
Other
30
125
78
536
Total non-operating (expense) income
(110 )
(6 )
(337 )
244
Income before income taxes
2,914
422
8,595
5,502
Income tax provision
855
10
4,036
1,442
Net income
$
2,059
$
412
$
4,559
$
4,060
Basic earnings per share
Class A common stock
$
0.87
$
0.17
$
1.90
$
1.69
Class B common stock
$
1.43
$
0.29
$
3.13
$
2.79
Class C common stock
$
3.46
$
0.69
$
7.60
$
6.76
Basic weighted-average shares outstanding
Class A common stock
1,840
1,899
1,852
1,915
Class B common stock
245
245
245
245
Class C common stock
14
18
15
19
Diluted earnings per share
Class A common stock
$
0.86
$
0.17
$
1.90
$
1.69
Class B common stock
$
1.42
$
0.28
$
3.13
$
2.78
Class C common stock
$
3.45
$
0.69
$
7.59
$
6.75
Diluted weighted-average shares outstanding
Class A common stock
2,385
2,386
2,404
2,406
Class B common stock
245
245
245
245
Class C common stock
14
18
15
19
(1)
We did not include Visa Europe’s financial results in our unaudited
consolidated statements of operations from the acquisition date,
June 21, 2016, through June 30, 2016 as the impact was immaterial.
The dilutive impact of the outstanding shares of series B and C
convertible participating preferred stock from June 21, 2016 through
June 30, 2016 was also not included in the calculation of basic or
diluted earnings per share as the effect was immaterial.
VISA INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended
June 30,
2017
2016
(in millions)
Operating Activities
Net income
$
4,559
$
4,060
Adjustments to reconcile net income to net cash provided by
operating activities:
Client incentives
3,219
2,416
Fair value adjustment for the Visa Europe put option
--
(255 )
Share-based compensation
183
152
Excess tax benefit for share-based compensation
--
(51 )
Depreciation and amortization of property, equipment, technology and
409
361
intangible assets
Deferred income taxes
1,715
(603 )
Right to recover for covered losses recorded in equity
(165 )
--
Charitable contribution of Visa Inc. shares
192
--
Other
30
43
Change in operating assets and liabilities:
Settlement receivable
42
332
Accounts receivable
(34 )
(92 )
Client incentives
(3,376 )
(2,638 )
Other assets
(192 )
(552 )
Accounts payable
(71 )
(35 )
Settlement payable
(19 )
(368 )
Accrued and other liabilities
(65 )
398
Accrued litigation
14
(46 )
Net cash provided by operating activities
6,441
3,122
Investing Activities
Purchases of property, equipment, technology and intangible assets
(512 )
(382 )
Investment securities, available-for-sale:
Purchases
(1,877 )
(26,883 )
Proceeds from maturities and sales
4,296
26,193
Acquisitions, net of $2.8 billion cash received from Visa Europe
(302 )
(9,082 )
Purchases of / contributions to other investments
(18 )
(9 )
Proceeds / distributions from other investments
--
4
Net cash provided by (used in) investing activities
1,587
(10,159 )
Financing Activities
Repurchase of class A common stock
(5,170 )
(5,300 )
Treasury stock--class C common stock
--
(170 )
Dividends paid
(1,189 )
(1,011 )
Proceeds from issuance of senior notes
--
15,971
Debt issuance costs
--
(98 )
Payments from litigation escrow account--U.S. retrospective
--
45
responsibility plan
Cash proceeds from issuance of common stock under employee equity
128
69
plans
Restricted stock and performance-based shares settled in cash for
(73 )
(89 )
taxes
Excess tax benefit for share-based compensation
--
51
Net cash (used in) provided by financing activities
(6,304 )
9,468
Effect of exchange rate changes on cash and cash equivalents
94
(62 )
Increase in cash and cash equivalents
1,818
2,369
Cash and cash equivalents at beginning of year
5,619
3,518
Cash and cash equivalents at end of period
$
7,437
$
5,887
Supplemental Disclosure
Series B and C convertible participating preferred stock issued in
$ --
$
5,717
Visa Europe acquisition
Deferred purchase consideration recorded for Visa Europe acquisition
$ --
$
1,236
Income taxes paid, net of refunds
$
2,239
$
2,043
Interest payments on debt
$
489
$
244
Accruals related to purchases of property, equipment, technology and
$
35
$
29
intangible assets
VISA INC.
FISCAL 2017 AND 2016 QUARTERLY RESULTS OF OPERATIONS
(UNAUDITED)
Fiscal 2017 Quarter Ended
Fiscal 2016 Quarter Ended
June 30,
March 31,
December 31,
September 30,
June 30,
2017
2016
2016
2016
2016(1)
(in millions)
Operating Revenues
Service revenues
$
1,948
$
1,993
$
1,918
$
1,768
$
1,635
Data processing revenues
1,984
1,843
1,892
1,779
1,541
International transaction revenues
1,571
1,469
1,489
1,489
1,084
Other revenues
209
203
203
218
209
Client incentives
(1,147 )
(1,031 )
(1,041 )
(993 )
(839 )
Net operating revenues
4,565
4,477
4,461
4,261
3,630
Operating Expenses
Personnel
698
704
571
690
509
Marketing
221
193
218
300
189
Network and processing
158
150
145
161
123
Professional fees
102
83
80
113
138
Depreciation and amortization
132
131
146
141
120
General and administrative
230
406
186
230
246
Litigation provision
--
2
15
1
--
Visa Europe Framework Agreement loss
--
--
--
--
1,877
Total operating expenses
1,541
1,669
1,361
1,636
3,202
Operating income
3,024
2,808
3,100
2,625
428
Non-operating (Expense) Income
Interest expense
(140 )
(135 )
(140 )
(135 )
(131 )
Other
30
29
19
20
125
Total non-operating (expense) income
(110 )
(106 )
(121 )
(115 )
(6 )
Income before income taxes
2,914
2,702
2,979
2,510
422
Income tax provision
855
2,272
909
579
10
Net income
$
2,059
$
430
$
2,070
$
1,931
$
412
(1)
We did not include Visa Europe’s financial results in our unaudited
consolidated statements of operations from the acquisition date,
June 21, 2016, through June 30, 2016 as the impact was immaterial.
VISA INC.
RECONCILIATION OF NON-GAAP FINANCIAL RESULTS
FISCAL THIRD QUARTER 2017 and 2016
(UNAUDITED)

Our financial results for the nine months ended June 30, 2017 and three and nine months ended June 30, 2016 reflect the impact of certain significant items that we do not believe are indicative of our ongoing operating performance in these or future periods as they are either non-recurring or have no cash impact. As such, we believe the presentation of adjusted financial results excluding the following items provides a clearer understanding of our operating performance for the periods presented. There were no comparable adjustments recorded for the three months ended June 30, 2017.

Elimination of deferred tax balances. During the second quarter of fiscal 2017, in connection with our legal entity reorganization, we eliminated deferred tax balances originally recognized upon the acquisition of Visa Europe, resulting in the recognition of a non-recurring, non-cash income tax provision of $1.5 billion.

Charitable contribution. During the second quarter of fiscal 2017, associated with our legal entity reorganization, we recognized a non-recurring, non-cash general and administrative expense of $192 million, before tax, related to the charitable donation of Visa Inc. shares that were acquired as part of the Visa Europe acquisition and held as treasury stock. Net of the related cash tax benefit of $71 million, determined by applying applicable tax rates, adjusted net income increased by $121 million.

Acquisition-related costs. During the three months ended June 30, 2016, we incurred $152 million of non-recurring acquisition costs in operating expense as a result of the Visa Europe transaction. This amount is comprised of $60 million of transaction expenses recorded in professional fees, and $92 million of U.K. stamp duty recorded in general and administrative expenses. Net of related tax benefit of $56 million, determined by applying applicable federal and state tax rates, the adjustment to net income was an increase of $96 million.

Visa Europe Framework Agreement loss. Upon consummation of the transaction, on June 21, 2016, we recorded a non-recurring loss of $1.9 billion, before tax, in operating expense resulting from the effective settlement of the Framework Agreement between us and Visa Europe. Net of related tax benefit of $693 million, determined by applying applicable federal and state tax rates, the adjustment to net income was an increase of $1.2 billion.

Net (losses) gains on currency forward contracts. During the second and third quarter of fiscal 2016, we entered into currency forward contracts to mitigate a portion of our foreign currency exchange rate risk associated with the upfront cash consideration paid in the Visa Europe acquisition. As a result, we recorded non-recurring, net losses of $42 million and net gains of $74 million, before tax, in other non-operating (expense) income for the three and nine months ended June 30, 2016, respectively. Net of related tax benefit of $8 million and tax expense of $27 million for the three and nine months ended June 30, 2016, respectively, determined by applying applicable federal and state tax rates, the adjustment to net income was an increase of $34 million and a decrease of $47 million, respectively.

Foreign exchange gain on euro deposits. During the three months ended June 30, 2016, we recorded a non-recurring foreign exchange gain of $145 million, before tax, in other non-operating income resulting from holding euro-denominated bank balances for a short period in advance of the Closing. Net of related tax expense of $54 million, determined by applying applicable federal and state tax rates, the impact to net income was a decrease of $91 million.

Revaluation of Visa Europe put option. During the first quarter of fiscal 2016, we recorded a decrease of $255 million in the fair value of the Visa Europe put option, resulting in the recognition of non-cash income in other non-operating income. This amount is not subject to income tax and therefore has no impact on our reported income tax provision.

Adjusted financial results are non-GAAP financial measures and should not be relied upon as substitutes for measures calculated in accordance with U.S. GAAP. The following tables reconcile our as-reported financial measures calculated in accordance with U.S. GAAP, to our respective non-GAAP adjusted financial measures for the nine months ended June 30, 2017 and three and nine months ended June 30, 2016. There were no comparable adjustments recorded for the three months ended June 30, 2017.

Nine Months Ended June 30, 2017
Non-
Income
Effective
Diluted
(in millions, except
Operating
operating
Before
Income
Earnings
percentages and per share
Operating
Margin
Income
Income
Income Tax
Tax
Net
Per
data)
Expenses
(1),(2)
(Expense)
Taxes
Provision
Rate(1)
Income
Share(1)
As reported
$
4,571
66 %
$
(337 )
$
8,595
$
4,036
47.0 %
$ 4,559
$
1.90
Elimination of deferred tax balances
--
-- %
--
--
(1,515 )
1,515
0.63
Charitable contribution
(192 )
1 %
--
192
71
121
0.05
As adjusted
$
4,379
68 %
$
(337 )
$
8,787
$
2,592
29.5 %
$ 6,195
$
2.58
Three Months Ended June 30, 2016
Non-
Income
Effective
Diluted
(in millions, except
Operating
operating
Before
Income
Earnings
percentages and per share
Operating
Margin
Income
Income
Income Tax
Tax
Net
Per
data)
Expenses
(1),(2)
(Expense)
Taxes
Provision
Rate(1)
Income
Share(1)
As reported
$
3,202
12 %
$
(6 )
$
422
$
10
2.3 %
$
412
$
0.17
Acquisition-related costs
(152 )
4 %
--
152
56
96
0.04
Visa Europe Framework Agreement loss
(1,877 )
52 %
--
1,877
693
1,184
0.50
Net losses on currency forward contracts
--
-- %
42
42
8
34
0.01
Foreign exchange gain on euro deposits
--
-- %
(145 )
(145 )
(54 )
(91 )
(0.04 )
As adjusted
$
1,173
68 %
$
(109 )
$
2,348
$
713
30.4 %
$ 1,635
$
0.69
Nine Months Ended June 30, 2016
Non-
Income
Effective
Diluted
(in millions, except
Operating
operating
Before
Income
Earnings
percentages and per share
Operating
Margin
Income
Income
Income Tax
Tax
Net
Per
data)
Expenses
(1),(2)
(Expense)
Taxes
Provision
Rate(1)
Income
Share(1)
As reported
$
5,563
49 %
$
244
$
5,502
$
1,442
26.2 %
$ 4,060
$
1.69
Acquisition-related costs
(152 )
1 %
--
152
56
96
0.04
Visa Europe Framework Agreement loss
(1,877 )
17 %
--
1,877
693
1,184
0.49
Net gains on currency forward contracts
--
-- %
(74 )
(74 )
(27 )
(47 )
(0.02 )
Foreign exchange gain on euro deposits
--
-- %
(145 )
(145 )
(54 )
(91 )
(0.04 )
Revaluation of Visa Europe put option
--
-- %
(255 )
(255 )
--
(255 )
(0.11 )
As adjusted
$
3,534
67 %
$
(230 )
$
7,057
$
2,110
29.9 %
$ 4,947
$
2.06
(1)
Figures in the table may not recalculate exactly due to rounding.
Operating margin, effective income tax rate, diluted earnings per
share and their respective totals are calculated based on unrounded
numbers.
(2)
Operating margin is calculated as operating income divided by net
operating revenues.
VISA INC.
RECONCILIATION OF NON-GAAP FINANCIAL RESULTS
FISCAL FULL-YEAR 2016
(UNAUDITED)

Our fiscal full-year 2017 annual diluted class A common stock earnings per share growth outlook is based on adjusted non-GAAP fiscal full-year 2016 results, which are reconciled to their closest comparable U.S. GAAP financial measure below.

Our financial results during the twelve months ended September 30, 2016 reflect the impact of certain significant items that we do not believe are indicative of our ongoing operating performance, as they are either non-recurring or have no cash impact. As such, we believe the presentation of adjusted financial results excluding the following items provides a clearer understanding of our operating performance for the period presented.

Severance cost. In the fiscal fourth quarter, we recorded a $110 million charge for severance costs related to personnel reductions including planned reductions at Visa Europe. Although we routinely record severance expenses, these charges are larger than any past quarterly accrual due to the acquisition and integration of Visa Europe. Net of related tax benefit of $38 million, determined by applying applicable tax rates, the adjustment to net income was an increase of $72 million.

Remeasurement of deferred tax liability. In September 2016, we recorded a non-cash, non-recurring $88 million gain upon the remeasurement of a deferred tax liability, recorded upon the acquisition of Visa Europe, to reflect a tax rate change in the United Kingdom.

Acquisition-related costs. During the twelve months ended September 30, 2016, we incurred $152 million of non-recurring acquisition costs in operating expense as a result of the Visa Europe transaction. This amount is comprised of $60 million of transaction expenses recorded in professional fees, and $92 million of U.K. stamp duty recorded in general and administrative expenses. Net of related tax benefit of $56 million, determined by applying applicable federal and state tax rates, the adjustment to net income was an increase of $96 million.

Visa Europe Framework Agreement loss. Upon consummation of the transaction, on June 21, 2016, we recorded a non-recurring loss of $1.9 billion, before tax, in operating expense resulting from the effective settlement of the Framework Agreement between Visa and Visa Europe. Net of related tax benefit of $693 million, determined by applying applicable federal and state tax rates, the adjustment to net income was an increase of $1.2 billion.

Net gains on currency forward contracts. During the twelve months ended September 30, 2016, we entered into currency forward contracts to mitigate a portion of the foreign currency exchange rate risk associated with the upfront cash consideration paid in the Visa Europe acquisition. As a result, we recorded non-recurring, net gains of $74 million, before tax, in other non-operating income. Net of related tax expense of $27 million, determined by applying applicable federal and state tax rates, the adjustment to net income was a decrease of $47 million.

Foreign exchange gain on euro deposits. During the twelve months ended September 30, 2016, we recorded a non-recurring foreign exchange gain of $145 million, before tax, in other non-operating income as a result of holding euro-denominated bank balances for a short period in advance of the closing date of the Visa Europe transaction. Net of related tax expense of $54 million, determined by applying applicable federal and state tax rates, the impact to net income was a decrease of $91 million.

Revaluation of Visa Europe put option. During the first quarter of fiscal 2016, we recorded a decrease of $255 million in the fair value of the Visa Europe put option, resulting in the recognition of non-cash income in other non-operating income. This amount is not subject to income tax and therefore has no impact on the reported income tax provision.

Adjusted financial results are non-GAAP financial measures and should not be relied upon as substitutes for measures calculated in accordance with U.S. GAAP. The following table reconciles our as-reported financial measures calculated in accordance with U.S. GAAP, to the respective non-GAAP adjusted financial measures for the twelve months ended September 30, 2016.

Twelve Months Ended September 30, 2016 (1)
Non-
Income
Effective
Diluted
(in millions, except
Operating
operating
Before
Income
Earnings
percentages and per share
Operating
Margin
Income
Income
Income
Tax Rate
Net
Per
data)
Expenses
(2),(3)
(Expense)
Taxes
Taxes
(2)
Income
Share(2)
As reported
$
7,199
52 %
$
129
$
8,012
$
2,021
25.2 %
$ 5,991
$
2.48
Severance cost
(110 )
1 %
--
110
38
72
0.03
Remeasurement of deferred tax liability
--
-- %
--
--
88
(88 )
(0.04 )
Acquisition-related costs
(152 )
1 %
--
152
56
96
0.04
Visa Europe Framework Agreement loss
(1,877 )
12 %
--
1,877
693
1,184
0.49
Net gains on currency forward contracts
--
-- %
(74 )
(74 )
(27 )
(47 )
(0.02 )
Foreign exchange gain on euro deposits
--
-- %
(145 )
(145 )
(54 )
(91 )
(0.04 )
Revaluation of Visa Europe put option
--
-- %
(255 )
(255 )
--
(255 )
(0.11 )
As adjusted
$
5,060
66 %
$
(345 )
$
9,677
$
2,815
29.1 %
$ 6,862
$
2.84
(1)
We did not include Visa Europe’s financial results in our unaudited
consolidated statements of operations from the acquisition date,
June 21, 2016, through June 30, 2016 as the impact was immaterial.
Our unaudited consolidated statement of operations for the year
ended September 30, 2016 includes Visa Europe’s financial results
for the three months ended September 30, 2016.
(2)
Figures in the table may not recalculate exactly due to rounding.
Operating margin, effective income tax rate, diluted earnings per
share and their respective totals are calculated based on unrounded
numbers.
(3)
Operating margin is calculated as operating income divided by net
operating revenues.

Operational Performance Data

The tables below provide information regarding the available operational results for the 3 months ended June 30, 2017, as well as the prior four quarterly reporting periods and the 12 months ended June 30, 2017 and 2016, for cards carrying the Visa, Visa Electron, V PAY and Interlink brands. Sections 1-4 below reflect the acquisition of Visa Europe, with Europe included in Visa Inc. results effective the 3 months ended September 30, 2016.

1. Branded Volume and Transactions

The tables present regional total volume, payments volume, and cash volume, and the number of payments transactions, cash transactions, accounts and cards for cards carrying the Visa, Visa Electron, V PAY and Interlink brands. Card counts include PLUS proprietary cards. Nominal and constant dollar growth rates over prior years are provided for volume-based data.

For the 3 Months Ended June 30, 2017
Total
Growth
Growth
Payments
Growth
Growth
Payments
Cash
Growth
Growth
Cash
Volume
(Nominal
(Constant
Volume
(Nominal
(Constant
Transactions
Volume
(Nominal
(Constant
Transactions
($ billions)
USD)
USD)
($ billions)
USD)
USD)
(millions)
($ billions)
USD)
USD)
(millions)
All Visa Credit & Debit
Asia Pacific
$
531
(0.1 %)
1.7 %
$
411
4.5 %
6.9 %
5,834
$
120
(13.1 %)
(13.0 %)
876
Canada
64
2.7 %
6.8 %
59
3.2 %
7.3 %
837
5
(2.2 %)
1.7 %
12
CEMEA
259
11.3 %
6.7 %
80
25.8 %
18.9 %
3,232
179
5.8 %
2.0 %
1,283
LAC
248
10.8 %
8.1 %
99
16.2 %
13.3 %
2,918
148
7.5 %
4.9 %
1,161
US
980
10.9 %
10.9 %
840
12.1 %
12.1 %
15,928
140
4.7 %
4.7 %
1,010
511
371
7,955
140
1,093
Europe
Visa Inc.
2,592
34.1 %
33.8 %
1,860
37.9 %
38.4 %
36,704
732
25.4 %
23.4 %
5,435
Visa Credit Programs
US
$
460
17.9 %
17.9 %
$
446
18.8 %
18.8 %
5,519
$
14
(4.0 %)
(4.0 %)
16
654
27.6 %
29.6 %
604
26.7 %
29.0 %
8,730
51
39.0 %
37.5 %
235
International
Visa Inc.
1,115
23.4 %
24.5 %
1,050
23.2 %
24.5 %
14,249
65
26.6 %
25.6 %
251
Visa Debit Programs
US
$
519
5.4 %
5.4 %
$
393
5.3 %
5.3 %
10,409
$
126
5.8 %
5.8 %
994
958
78.5 %
74.5 %
417
238.1 %
229.5 %
12,046
541
30.9 %
28.1 %
4,190
International
Visa Inc.
1,478
43.5 %
41.8 %
811
63.1 %
62.0 %
22,455
667
25.3 %
23.2 %
5,184
For the 3 Months Ended March 31, 2017
Total
Growth
Growth
Payments
Growth
Growth
Payments
Cash
Growth
Growth
Cash
Volume
(Nominal
(Constant
Volume
(Nominal
(Constant
Transactions
Volume
(Nominal
(Constant
Transactions
Accounts
Cards
($ billions)
USD)
USD)
($ billions)
USD)
USD)
(millions)
($ billions)
USD)
USD)
(millions)
(millions)
(millions)
All Visa Credit & Debit
Asia Pacific
$
514
0.7 %
1.8 %
$
398
5.7 %
7.0 %
5,509
$
117
(13.4 %)
(12.8 %)
857
817
924
Canada
58
13.1 %
8.7 %
53
13.8 %
9.4 %
721
5
5.9 %
1.8 %
10
48
55
CEMEA
236
15.2 %
6.9 %
73
28.5 %
16.7 %
2,907
163
10.1 %
3.0 %
1,213
341
331
LAC
240
17.9 %
11.3 %
96
21.4 %
13.4 %
3,021
144
15.7 %
9.9 %
1,142
419
455
US
909
10.5 %
10.5 %
776
11.8 %
11.8 %
14,580
133
3.2 %
3.2 %
933
712
859
462
339
7,275
123
1,012
480
533
Europe
Visa Inc.
2,419
34.9 %
33.1 %
1,734
38.5 %
37.5 %
34,013
685
26.7 %
23.0 %
5,167
2,818
3,155
Visa Credit Programs
US
$
418
19.9 %
19.9 %
$
404
20.7 %
20.7 %
4,856
$
14
0.3 %
0.3 %
16
274
334
619
30.5 %
29.4 %
572
28.5 %
27.9 %
8,298
48
59.6 %
50.7 %
222
649
726
International
Visa Inc.
1,038
26.0 %
25.4 %
976
25.2 %
24.8 %
13,154
62
40.3 %
34.9 %
238
924
1,060
Visa Debit Programs
US
$
491
3.5 %
3.5 %
$
372
3.5 %
3.5 %
9,724
$
119
3.6 %
3.6 %
917
437
524
890
79.8 %
72.6 %
386
241.1 %
222.9 %
11,135
504
32.0 %
27.3 %
4,012
1,457
1,571
International
Visa Inc.
1,381
42.5 %
39.5 %
758
60.4 %
58.3 %
20,859
623
25.5 %
22.0 %
4,929
1,894
2,096
For the 3 Months Ended December 31, 2016
Total
Growth
Growth
Payments
Growth
Growth
Payments
Cash
Growth
Growth
Cash
Volume
(Nominal
(Constant
Volume
(Nominal
(Constant
Transactions
Volume
(Nominal
(Constant
Transactions
Accounts
Cards
($ billions)
USD)
USD)
($ billions)
USD)
USD)
(millions)
($ billions)
USD)
USD)
(millions)
(millions)
(millions)
All Visa Credit & Debit
Asia Pacific
$
538
2.8 %
3.7 %
$
419
8.2 %
9.4 %
5,662
$
119
(12.6 %)
(12.5 %)
920
802
908
Canada
63
5.5 %
5.1 %
58
5.7 %
5.3 %
778
5
3.5 %
3.1 %
10
50
55
CEMEA
246
7.8 %
8.7 %
72
19.8 %
19.9 %
2,823
174
3.5 %
4.7 %
1,302
334
322
LAC
250
5.6 %
8.7 %
98
9.5 %
11.9 %
3,155
152
3.2 %
6.7 %
1,215
418
453
US
937
11.4 %
11.4 %
804
12.6 %
12.6 %
15,326
134
4.4 %
4.4 %
935
718
862
491
355
7,661
136
1,094
486
542
Europe
Visa Inc.
2,525
33.6 %
34.5 %
1,805
38.3 %
39.0 %
35,405
720
23.2 %
24.6 %
5,476
2,808
3,143
Visa Credit Programs
US
$
444
19.5 %
19.5 %
$
430
20.3 %
20.3 %
5,350
$
14
0.0 %
0.0 %
16
282
335
647
28.3 %
29.7 %
597
27.0 %
28.4 %
8,683
50
46.9 %
47.6 %
243
653
728
International
Visa Inc.
1,092
24.6 %
25.4 %
1,027
24.1 %
24.9 %
14,033
64
33.0 %
33.4 %
259
935
1,062
Visa Debit Programs
US
$
493
4.9 %
4.9 %
$
374
4.9 %
4.9 %
9,976
$
119
5.0 %
5.0 %
919
437
527
940
73.0 %
75.5 %
404
234.0 %
236.8 %
11,396
536
26.9 %
28.9 %
4,298
1,437
1,554
International
Visa Inc.
1,433
41.4 %
42.5 %
778
62.9 %
63.3 %
21,372
655
22.3 %
23.8 %
5,217
1,873
2,080
For the 3 Months Ended September 30, 2016
Total
Growth
Growth
Payments
Growth
Growth
Payments
Cash
Growth
Growth
Cash
Volume
(Nominal
(Constant
Volume
(Nominal
(Constant
Transactions
Volume
(Nominal
(Constant
Transactions
Accounts
Cards
($ billions)
USD)
USD)
($ billions)
USD)
USD)
(millions)
($ billions)
USD)
USD)
(millions)
(millions)
(millions)
All Visa Credit & Debit
Asia Pacific
$
536
5.1 %
3.9 %
$
406
9.4 %
7.8 %
5,244
$
129
(6.4 %)
(6.6 %)
997
786
891
Canada
62
5.9 %
5.8 %
57
5.9 %
5.7 %
763
5
6.3 %
6.2 %
12
48
56
CEMEA
237
2.4 %
7.6 %
68
11.9 %
16.6 %
2,583
169
(1.0 %)
4.3 %
1,242
329
318
LAC
236
3.9 %
10.5 %
91
7.2 %
13.7 %
2,995
145
1.9 %
8.6 %
1,165
408
444
US
903
9.9 %
9.9 %
768
10.8 %
10.8 %
14,925
135
5.1 %
5.1 %
956
697
835
648
468
9,581
179
1,432
479
542
Europe
Visa Inc.
2,622
41.8 %
43.3 %
1,859
47.0 %
47.2 %
36,091
763
30.5 %
34.4 %
5,804
2,747
3,086
Visa Credit Programs
US
$
424
18.3 %
18.3 %
$
409
18.8 %
18.8 %
5,123
$
15
6.1 %
6.1 %
18
276
329
725
47.6 %
47.4 %
656
44.0 %
43.6 %
9,556
69
94.2 %
98.3 %
394
655
731
International
Visa Inc.
1,149
35.2 %
35.1 %
1,066
33.1 %
32.9 %
14,678
84
68.8 %
71.3 %
413
931
1,060
Visa Debit Programs
US
$
479
3.4 %
3.4 %
$
359
2.9 %
2.9 %
9,802
$
120
4.9 %
4.9 %
938
421
506
994
85.3 %
92.4 %
435
276.3 %
287.0 %
11,611
559
32.9 %
38.3 %
4,453
1,395
1,519
International
Visa Inc.
1,472
47.4 %
50.3 %
793
71.0 %
72.2 %
21,413
679
26.9 %
30.9 %
5,391
1,816
2,026
For the 3 Months Ended June 30, 2016
Total
Growth
Growth
Payments
Growth
Growth
Payments
Cash
Growth
Growth
Cash
Volume
(Nominal
(Constant
Volume
(Nominal
(Constant
Transactions
Volume
(Nominal
(Constant
Transactions
Accounts
Cards
($ billions)
USD)
USD)
($ billions)
USD)
USD)
(millions)
($ billions)
USD)
USD)
(millions)
(millions)
(millions)
All Visa Credit & Debit
Asia Pacific
$
531
4.3 %
7.2 %
$
393
7.9 %
10.3 %
5,055
$
138
(5.0 %)
(0.4 %)
1,014
766
870
Canada
62
0.7 %
6.7 %
57
0.5 %
6.4 %
741
5
3.6 %
9.7 %
11
47
54
CEMEA
233
(2.0 %)
11.4 %
64
4.8 %
18.8 %
2,415
169
(4.3 %)
8.8 %
1,255
331
318
LAC
223
(5.8 %)
10.1 %
86
(3.3 %)
13.3 %
2,860
138
(7.2 %)
8.2 %
1,127
409
445
883
9.1 %
9.1 %
749
9.7 %
9.7 %
14,680
134
5.9 %
5.9 %
973
677
818
US
Visa Inc.
1,933
4.2 %
8.9 %
1,349
7.6 %
10.4 %
25,752
584
(3.0 %)
5.7 %
4,380
2,230
2,505
Visa Credit Programs
US
$
390
10.9 %
10.9 %
$
376
10.9 %
10.9 %
4,583
$
15
10.9 %
10.9 %
17
271
322
513
4.5 %
9.6 %
476
5.1 %
9.7 %
6,623
37
(2.0 %)
7.6 %
159
509
569
International
Visa Inc.
903
7.2 %
10.1 %
852
7.5 %
10.2 %
11,206
51
1.4 %
8.5 %
176
780
891
Visa Debit Programs
US
$
493
7.7 %
7.7 %
$
374
8.5 %
8.5 %
10,097
$
119
5.3 %
5.3 %
956
406
495
537
(3.3 %)
8.0 %
123
5.4 %
17.3 %
4,449
414
(5.6 %)
5.5 %
3,249
1,044
1,118
International
Visa Inc.
1,030
1.7 %
7.9 %
497
7.7 %
10.6 %
14,546
533
(3.4 %)
5.5 %
4,204
1,450
1,614
For the 12 Months Ended June 30, 2017
Total
Growth
Growth
Payments
Growth
Growth
Payments
Cash
Growth
Growth
Cash
Volume
(Nominal
(Constant
Volume
(Nominal
(Constant
Transactions
Volume
(Nominal
(Constant
Transactions
($ billions)
USD)
USD)
($ billions)
USD)
USD)
(millions)
($ billions)
USD)
USD)
(millions)
All Visa Credit & Debit
Asia Pacific
$
2,119
2.1 %
2.8 %
$
1,634
6.9 %
7.8 %
22,249
$
485
(11.3 %)
(11.2 %)
3,650
Canada
246
6.5 %
6.5 %
226
6.8 %
6.8 %
3,099
20
3.2 %
3.2 %
44
CEMEA
978
9.0 %
7.5 %
293
21.4 %
18.1 %
11,545
685
4.4 %
3.5 %
5,040
LAC
974
9.3 %
9.6 %
385
13.4 %
13.1 %
12,089
589
6.7 %
7.4 %
4,682
US
3,729
10.7 %
10.7 %
3,187
11.8 %
11.8 %
60,760
542
4.4 %
4.4 %
3,835
2,112
1,533
32,472
579
4,631
Europe
Visa Inc.
10,158
36.1 %
36.1 %
7,258
40.4 %
40.5 %
142,214
2,900
26.4 %
26.3 %
21,882
Visa Credit Programs
US
$
1,747
18.9 %
18.9 %
$
1,689
19.6 %
19.6 %
20,848
$
58
0.6 %
0.6 %
66
2,646
33.4 %
34.0 %
2,429
31.5 %
32.2 %
35,267
217
59.9 %
58.4 %
1,094
International
Visa Inc.
4,393
27.2 %
27.6 %
4,118
26.3 %
26.7 %
56,115
275
42.1 %
41.2 %
1,161
Visa Debit Programs
US
$
1,982
4.3 %
4.3 %
$
1,498
4.2 %
4.2 %
39,911
$
484
4.8 %
4.8 %
3,768
3,783
79.1 %
78.7 %
1,642
247.1 %
243.2 %
46,187
2,141
30.6 %
30.6 %
16,953
International
Visa Inc.
5,765
43.7 %
43.5 %
3,140
64.3 %
63.8 %
86,098
2,625
25.0 %
25.0 %
20,721
For the 12 Months Ended June 30, 2016
Total
Growth
Growth
Payments
Growth
Growth
Payments
Cash
Growth
Growth
Cash
Volume
(Nominal
(Constant
Volume
(Nominal
(Constant
Transactions
Volume
(Nominal
(Constant
Transactions
Accounts
Cards
($ billions)
USD)
USD)
($ billions)
USD)
USD)
(millions)
($ billions)
USD)
USD)
(millions)
(millions)
(millions)
All Visa Credit & Debit
Asia Pacific
$
2,076
2.7 %
9.2 %
$
1,528
7.7 %
13.8 %
19,370
$
548
(9.1 %)
(1.6 %)
4,062
766
870
Canada
231
(7.0 %)
5.5 %
212
(7.2 %)
5.3 %
2,820
19
(4.8 %)
7.9 %
46
47
54
CEMEA
897
(9.6 %)
8.8 %
241
(2.2 %)
16.6 %
8,614
656
(12.0 %)
6.1 %
4,847
331
318
LAC
891
(14.4 %)
8.8 %
339
(14.0 %)
12.3 %
11,278
552
(14.7 %)
6.8 %
4,480
409
445
3,370
9.2 %
9.2 %
2,850
9.9 %
9.9 %
55,929
520
5.7 %
5.7 %
3,798
677
818
US
Visa Inc.
7,464
1.0 %
9.0 %
5,171
5.9 %
11.3 %
98,012
2,294
(8.5 %)
4.2 %
17,234
2,230
2,505
Visa Credit Programs
US
$
1,470
10.1 %
10.1 %
$
1,412
10.2 %
10.2 %
17,261
$
58
7.6 %
7.6 %
67
271
322
1,983
0.7 %
11.4 %
1,847
2.2 %
12.4 %
25,605
136
(16.4 %)
(0.7 %)
643
509
569
International
Visa Inc.
3,453
4.5 %
10.8 %
3,259
5.5 %
11.4 %
42,866
194
(10.4 %)
1.7 %
710
780
891
Visa Debit Programs
US
$
1,900
8.5 %
8.5 %
$
1,438
9.6 %
9.6 %
38,667
$
462
5.5 %
5.5 %
3,731
406
495
2,111
(9.5 %)
6.6 %
473
(1.7 %)
15.4 %
16,478
1,638
(11.6 %)
4.2 %
12,793
1,044
1,118
International
Visa Inc.
4,011
(1.8 %)
7.5 %
1,911
6.6 %
11.0 %
55,145
2,100
(8.3 %)
4.5 %
16,524
1,450
1,614

2. Europe Co-badge Payments Volume Growth Impact

The table below reflects total Visa Inc., International and Europe payments volume growth rates over prior year adjusted to exclude the Europe co-badge volumes.

Growth
Growth
(Constant USD)
(Nominal USD)
Quarter Ended
Quarter Ended
Sep’16
Dec’16
Mar’17
Jun’17
Sep’16
Dec’16
Mar’17
Jun’17
Visa Inc. - As Reported
47.2 %
39.0 %
37.5 %
38.4 %
47.0 %
38.3 %
38.5 %
37.9 %
excluding co-badge
38.7 %
39.0 %
37.5 %
38.4 %
38.5 %
38.3 %
38.5 %
37.9 %
International - As Reported
91.6 %
71.1 %
69.1 %
71.7 %
91.0 %
69.3 %
71.6 %
70.2 %
excluding co-badge
72.6 %
71.1 %
69.1 %
71.7 %
72.0 %
69.3 %
71.6 %
70.2 %
Europe Normalized (1)
6.8 %
(17.1 %)
(16.6 %)
(16.5 %)
(1.2 %)
(25.8 %)
(24.3 %)
(22.4 %)
excluding co-badge
7.5 %
9.7 %
9.7 %
9.3 %
(2.8 %)
(4.3 %)
(2.3 %)
0.3 %
(1)
Europe volumes were first included in Visa Inc.’s volumes starting
in the quarter ended September 30, 2016. Europe Normalized growth
includes Europe volumes for the prior year period before Visa Inc.
acquired Visa Europe.

Note:

Effective June 9, 2016, Article 8 of the EU Interchange Fee Regulation states that payment card networks cannot impose reporting requirements or the obligation to pay fees on payment transactions where their payment brand is present but their network is not used. Prior to this regulation, Visa collected a small service fee in a few countries, particularly France, on domestic payment transactions where Visa cards are co-badged with a domestic network. Clients in Europe continued to report co-badged volume through the quarter ended September 2016; however, effective with the quarter ended December 2016 Visa co-badge volume is no longer included in reported volume.

3. Cross-Border Volume

The table below represents cross-border volume growth for cards carrying the Visa, Visa Electron, V PAY, Interlink and PLUS brands. Cross-border volume refers to payments and cash volume where the issuing country is different from the merchant country.

Normalized
Growth
Growth
Growth (2)
Period
(Nominal USD)
(Constant USD)
(Constant USD)
3 Months Ended
June 30, 2017 (1)
142 %
147 %
11 %
March 31, 2017 (1)
129 %
132 %
11 %
December 31, 2016 (1)
135 %
140 %
12 %
September 30, 2016 (1)
146 %
149 %
10 %
June 30, 2016
2 %
5 %
12 Months Ended
June 30, 2017 (1)
138 %
142 %
June 30, 2016
(1 %)
5 %
(1)
Europe is included as part of Visa Inc. effective with the 3 months
ended September 30, 2016.
(2)
Europe volumes and transactions were first included as part of Visa
Inc. starting in the quarter ended September 30, 2016. Normalized
Growth includes Europe activity in prior year periods before Visa
Inc. acquired Visa Europe.

4. Visa Processed Transactions

The table below represents transactions involving Visa, Visa Electron, V PAY, Interlink and PLUS cards processed on Visa’s networks.

Processed
Transactions
Normalized
Period
(millions)
Growth
Growth (2)
3 Months Ended
June 30, 2017 (1)
28,450
44 %
13 %
March 31, 2017 (1)
26,256
42 %
12 %
December 31, 2016 (1)
27,329
44 %
13 %
September 30, 2016 (1)
25,921
41 %
12 %
June 30, 2016
19,778
10 %
12 Months Ended
June 30, 2017 (1)
107,955
43 %
June 30, 2016
75,603
9 %
(1)
Europe is included as part of Visa Inc. effective with the 3 months
ended September 30, 2016.
(2)
Europe volumes and transactions were first included as part of Visa
Inc. starting in the quarter ended September 30, 2016. Normalized
Growth includes Europe activity in prior year periods before Visa
Inc. acquired Visa Europe.

Footnote

Payments volume represents the aggregate dollar amount of purchases made with cards carrying the Visa, Visa Electron, V PAY and Interlink brands for the relevant period, and cash volume represents the aggregate dollar amount of cash disbursements obtained with these cards for the relevant period and includes the impact of balance transfers and convenience checks, but excludes proprietary PLUS volume. Total volume represents payments and cash volume.

Visa payment products are comprised of credit and debit programs, and data relating to each program is included in the tables. Debit programs include Visa’s signature based and Interlink (PIN) debit programs.

The data presented is based on results reported quarterly by Visa’s financial institution clients on their operating certificates. Estimates may be utilized if data is unavailable.

On occasion, previously presented information may be updated. Prior period updates, if any, are not material.

Europe is reported and included in Visa Inc. results effective with the 3 months ended September 2016. Visa’s CEMEA region is comprised of countries in Central Europe, the Middle East and Africa. Several European Union countries in Central Europe, Israel and Turkey are not included in CEMEA. LAC is comprised of countries in Central and South America and the Caribbean. International includes Asia Pacific, Canada, CEMEA, Europe and LAC.

Information denominated in U.S. dollars is calculated by applying an established U.S. dollar/local currency exchange rate for each local currency in which Visa Inc. volumes are reported ("Nominal USD"). These exchange rates are calculated on a quarterly basis using the established exchange rate for each quarter. To eliminate the impact of foreign currency fluctuations against the U.S. dollar in measuring performance, Visa Inc. also reports year-over-year growth in total volume, payments volume and cash volume on the basis of local currency information ("Constant USD"). This presentation represents Visa’s historical methodology which may be subject to review and refinement.

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SOURCE: Visa Inc.

Visa Inc.
Investor Relations:
Jack Carsky, Joon Huh, or Victoria Hyde-Dunn, 650-432-7644
ir@visa.com
or
Media Relations:
Nathaniel Sillin, 415-805-4892
globalmedia@visa.com