News Details

Visa Inc. Reports Strong Fiscal Third Quarter 2017 Results

07/20/2017

Performance Driven by Continued Strength in Payments Volume, Cross-Border Volume and Processed Transactions

SAN FRANCISCO--(BUSINESS WIRE)-- Visa Inc. (NYSE: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. (NYSE: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 and outstanding at June 30, 2017 and September 30, 2016 2,326 2,516
Series C convertible participating preferred stock, 3 shares issued and outstanding at June 30, 2017 and September 30, 2016 3,200 3,201
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 intangible assets 409 361
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 responsibility plan 45
Cash proceeds from issuance of common stock under employee equity plans 128 69
Restricted stock and performance-based shares settled in cash for taxes (73 ) (89 )
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 Visa Europe acquisition $ $ 5,717
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 intangible assets $ 35 $ 29
 
 
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

Europe

  511   371 7,955     140 1,093
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

International

  654 27.6 % 29.6 %   604 26.7 % 29.0 % 8,730     51 39.0 % 37.5 % 235
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

International

  958 78.5 % 74.5 %   417 238.1 % 229.5 % 12,046     541 30.9 % 28.1 % 4,190
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

Europe

  462   339 7,275     123 1,012 480 533
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

International

  619 30.5 % 29.4 %   572 28.5 % 27.9 % 8,298     48 59.6 % 50.7 % 222 649 726
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

International

  890 79.8 % 72.6 %   386 241.1 % 222.9 % 11,135     504 32.0 % 27.3 % 4,012 1,457 1,571
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

Europe

  491   355 7,661   136 1,094 486 542
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

International

  647 28.3 % 29.7 %   597 27.0 % 28.4 % 8,683   50 46.9 % 47.6 % 243 653 728
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

International

  940 73.0 % 75.5 %   404 234.0 % 236.8 % 11,396   536 26.9 % 28.9 % 4,298 1,437 1,554
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

Europe

 

648

 

468

9,581    

179

1,432 479 542
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

International

 

725

47.6 % 47.4 %  

656

44.0 % 43.6 % 9,556    

69

94.2 % 98.3 % 394 655 731
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

International

 

994

85.3 % 92.4 %  

435

276.3 % 287.0 % 11,611    

559

32.9 % 38.3 % 4,453 1,395 1,519
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

US

 

883

9.1 % 9.1 %  

749

9.7 % 9.7 % 14,680  

134

5.9 % 5.9 % 973 677 818
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

International

 

513

4.5 % 9.6 %  

476

5.1 % 9.7 % 6,623  

37

(2.0 %) 7.6 % 159 509 569
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

International

 

537

(3.3 %) 8.0 %  

123

5.4 % 17.3 % 4,449  

414

(5.6 %) 5.5 % 3,249 1,044 1,118
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

Europe

 

2,112

 

1,533

32,472  

579

4,631
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

International

 

2,646

33.4 % 34.0 %  

2,429

31.5 % 32.2 % 35,267  

217

59.9 % 58.4 % 1,094
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

International

 

3,783

79.1 % 78.7 %  

1,642

247.1 % 243.2 % 46,187  

2,141

30.6 % 30.6 % 16,953
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

US

 

3,370

9.2 % 9.2 %  

2,850

9.9 % 9.9 % 55,929  

520

5.7 % 5.7 % 3,798 677 818
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

International

 

1,983

0.7 % 11.4 %  

1,847

2.2 % 12.4 % 25,605  

136

(16.4 %) (0.7 %) 643 509 569
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

International

 

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
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.

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