Visa Inc. (NYSE:V) today announced financial results for the
Company’s fiscal second quarter 2017, ended March 31,
2017.
Fiscal Second Quarter 2017 Key Highlights:
- GAAP net income of $430 million or
$0.18 per share including special items related to the legal entity
reorganization of Visa Europe
- Adjusted net income of $2.1 billion or
$0.86 per share excluding special items related to the legal entity
reorganization of Visa Europe
- Net operating revenue of $4.5 billion,
an increase of 23%, 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 37% over the prior year at $1.7 trillion
- Cross-border volume growth, on a
constant dollar basis, was 132% or 11% inclusive of Europe in prior
year results
- Total Visa processed transactions were
26.3 billion, a 42% increase over the prior year, or 12% growth
inclusive of Europe in prior year results
- Newly-formed Visa Foundation funded
with contribution of $192 million
- Returned approximately $2.1 billion of
capital to shareholders in the form of share repurchases and
dividends
- Board authorized a new $5.0 billion
class A common stock share repurchase program
“In the face of geo-political uncertainty, Visa continues to
execute well against our operating plan and strategic priorities,
delivering sustained growth across nearly every part of our
business,” said Alfred F. Kelly, Jr., Chief Executive Officer of
Visa Inc. "Robust growth in payments volume, cross-border volume
and processed transactions drove better than expected results.
Looking ahead, we are continuing our efforts across the globe to
electronify commerce and digitize economies to the benefit of
consumers and societies alike.”
Fiscal Second Quarter 2017 Special Items Related to the Visa
Europe Reorganization:
During the fiscal second quarter of 2017, the Company completed
a legal entity reorganization of Visa Europe and certain other Visa
subsidiaries to align the Company's global corporate structure to
the geographic jurisdictions in which it conducts business
operations. Associated with this reorganization, the Company
recorded the following special items:
- $1.5 billion non-recurring, non-cash
income tax provision related to the elimination of deferred tax
balances originally recorded upon the acquisition of Visa Europe in
June 2016; and
- $192 million non-recurring, non-cash
general and administrative expense associated with the charitable
donation of Visa Inc. shares that were acquired as part of the Visa
Europe acquisition and held as treasury stock. The newly-formed
Visa Foundation received the donation of Visa Inc. shares and the
Company recognized a $71 million cash income tax benefit.
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. The
Company’s adjusted quarterly operating expenses, effective income
tax rate, net income and earnings per share of class A common stock
are non-GAAP financial measures that are reconciled to their most
directly comparable GAAP measure in the accompanying financial
tables.
Fiscal Second Quarter 2017 Financial Highlights:
GAAP net income for the quarter, inclusive of special items
related to the legal entity reorganization of Visa Europe, was $430
million or $0.18 per share, both decreasing 75% over the prior
year's results, primarily related to the special items from the
Visa Europe legal entity reorganization noted above.
Excluding special items, adjusted net income for the quarter was
$2.1 billion and adjusted earnings per share was $0.86, both
increasing 27% over the prior year's adjusted results. Exchange
rate shifts versus the prior year negatively impacted earnings per
share growth by approximately 4 percentage points. The prior year's
adjusted results exclude the impact of a non-recurring,
non-operating gain related to currency forward contracts.
Net operating revenue in the fiscal second quarter of 2017 was
$4.5 billion, an increase of 23%, 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 2.5 percentage points.
Payments volume growth, on a constant dollar basis, for the
three months ended December 31, 2016, on which fiscal second
quarter service revenue is recognized, was 39% over the prior year
at $1.8 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 March 31, 2017, was 37% over the prior year at
$1.7 trillion.
Cross-border volume growth, on a constant dollar basis, was 132%
for the three months ended March 31, 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 March 31, 2017, were
26.3 billion, a 42% increase over the prior year. Total processed
transactions growth was 12%, inclusive of Europe in prior year
results.
Fiscal second quarter 2017 service revenues were $2.0 billion,
an increase of 17% 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 25% over the prior year to $1.8 billion.
International transaction revenues grew 41% over the prior year to
$1.5 billion. Other revenues were $203 million, an increase of 3%
over the prior year. Client incentives, which are a contra revenue
item, were $1.0 billion and represent 18.7% of gross revenues.
GAAP operating expenses were $1.7 billion for the fiscal second
quarter 2017, a 40% increase over the prior year's results,
primarily driven by increases in general and administrative expense
related to the charitable donation to the newly-formed Visa
Foundation. Adjusted operating expenses, which excludes the
charitable donation, were $1.5 billion, an increase of 24% over the
prior year's results, primarily from the inclusion of Visa Europe's
operating expenses following the acquisition.
GAAP effective income tax rate was 84.1% for the quarter ended
March 31, 2017, including the $1.5 billion non-recurring,
non-cash income tax provision related to the elimination of
deferred tax balances originally recorded upon the acquisition of
Visa Europe and the $71 million tax benefit related to the
charitable donation. Adjusted effective income tax rate was 28.6%,
excluding the aforementioned items.
Cash, cash equivalents, and available-for-sale investment
securities were $10.7 billion at March 31, 2017.
The weighted-average number of diluted shares of class A common
stock outstanding was 2.41 billion for the quarter ended
March 31, 2017.
Notable Events:
During the three months ended March 31, 2017, the Company
repurchased 19.1 million shares of class A common stock, at an
average price of $88.51 per share, using $1.7 billion of cash on
hand. In the six months ended March 31, 2017, the Company
repurchased a total of 41.4 million shares of class A common stock,
at an average price of $83.81 per share, using $3.5 billion of cash
on hand. The board of directors has authorized a new $5.0 billion
class A common stock share repurchase program and the Company
currently has $7.2 billion of funds available for share
repurchase.
On April 18, 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 June 6, 2017, to all holders of record of
the Company’s common and preferred stock as of May 19,
2017.
Financial Outlook for Fiscal Full-Year 2017:
Visa Inc. updates its financial outlook for the following GAAP
metrics for fiscal full-year 2017:
- Annual net revenue growth: High end of
16% to 18% range on a nominal dollar basis, including 2.0 to 2.5
ppts of negative foreign currency impact;
- Client incentives as a percent of gross
revenues: Low end of 20.5% to 21.5% range;
- Annual operating margin: Mid 60s;
- Effective tax rate: Mid 40s on a GAAP
basis and approximately 30% on an adjusted, non-GAAP basis;
and
- Annual diluted class A common stock
earnings per share growth: High single-digits on a GAAP nominal
dollar basis and high end of mid-teens on an adjusted, non-GAAP
nominal dollar basis (see note below), both including 2.5 to 3.0
ppts of negative foreign currency impact.
Note: The financial outlook for fiscal full-year 2017 includes
Visa Europe integration expenses of approximately $80 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 Second 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)
March 31, 2017
September 30,2016
(in millions, except par value data) Assets Cash and
cash equivalents
$ 6,427 $ 5,619 Restricted cash—U.S.
litigation escrow
1,029 1,027 Investment securities: Trading
78 71 Available-for-sale
1,417 3,248 Settlement
receivable
3,350 1,467 Accounts receivable
1,081
1,041 Customer collateral
1,043 1,001 Current portion of
client incentives
292
284 Prepaid expenses and other current assets
788 555
Total current assets
15,505 14,313 Investment
securities, available-for-sale
2,882 3,931 Client incentives
486 448 Property, equipment and technology, net
2,133
2,150 Other assets
980 893 Intangible assets, net
26,416 27,234 Goodwill
14,825 15,066
Total assets
$ 63,227 $ 64,035
Liabilities Accounts payable
$ 120 $ 203
Settlement payable
2,879 2,084 Customer collateral
1,043 1,001 Accrued compensation and benefits
500 673
Client incentives
1,753 1,976 Accrued liabilities
1,167 1,128 Current maturities of long-term debt
1,748 — Accrued litigation
996 981
Total current liabilities
10,206 8,046 Long-term debt
14,140 15,882 Deferred tax liabilities
5,731 4,808
Deferred purchase consideration
1,180 1,225 Other
liabilities
1,187 1,162 Total liabilities
32,444 31,123
Equity Preferred stock,
$0.0001 par value, 25 shares authorized and 5 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 March 31,2017
and September 30, 2016
2,397 2,516
Series C convertible participating
preferred stock, 3 shares issued and outstanding at March 31,2017
and September 30, 2016
3,200 3,201
Class A common stock, $0.0001 par value,
2,001,622 shares authorized, 1,847 and 1,871 sharesissued and
outstanding at March 31, 2017 and September 30, 2016,
respectively
— —
Class B common stock, $0.0001 par value,
622 shares authorized, 245 shares issued and outstandingat March
31, 2017 and September 30, 2016
— —
Class C common stock, $0.0001 par value,
1,097 shares authorized, 14 and 17 shares issued andoutstanding at
March 31, 2017 and September 30, 2016, respectively
— — Treasury stock
— (170 ) Right to recover for
covered losses
(77 ) (34 ) Additional paid-in capital
17,103 17,395 Accumulated income
9,140 10,462
Accumulated other comprehensive loss, net: Investment securities,
available-for-sale
45 36 Defined benefit pension and other
postretirement plans
(216 ) (225 ) Derivative
instruments classified as cash flow hedges
(6 ) (50 )
Foreign currency translation adjustments
(803 ) (219
) Total accumulated other comprehensive loss, net
(980
) (458 ) Total equity
30,783 32,912
Total liabilities and equity
$ 63,227 $ 64,035
VISA INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months EndedMarch
31,
Six Months EndedMarch
31,
2017 2016 2017 2016 (in millions,
except per share data) Operating Revenues Service
revenues
$ 1,993 $ 1,699
$ 3,911 $
3,344 Data processing revenues
1,843 1,473
3,735
2,952 International transaction revenues
1,469 1,045
2,958 2,076 Other revenues
203 198
406 396
Client incentives
(1,031 ) (789 )
(2,072
) (1,577 )
Net operating revenues 4,477
3,626
8,938 7,191
Operating
Expenses Personnel
704 528
1,275 1,027 Marketing
193 186
411 380 Network and processing
150 126
295 254 Professional fees
83 66
163 138
Depreciation and amortization
131 121
277 241 General
and administrative
406 164
592 320 Litigation
provision
2 1
17 1
Total operating expenses 1,669 1,192
3,030 2,361
Operating income
2,808 2,434
5,908 4,830
Non-operating (Expense) Income Interest expense
(135 ) (132 )
(275 ) (161 ) Other
29 139
48 411
Total
non-operating (expense) income (106 ) 7
(227 ) 250 Income before income taxes
2,702 2,441
5,681 5,080 Income tax provision
2,272 734
3,181 1,432
Net income $ 430 $ 1,707
$ 2,500 $ 3,648
Basic
earnings per share Class A common stock
$ 0.18
$ 0.71
$ 1.04 $ 1.51
Class B common stock
$ 0.30 $ 1.17
$ 1.71 $ 2.49 Class C common stock
$ 0.72 $ 2.85
$ 4.15
$ 6.05
Basic weighted-average
sharesoutstanding
Class A common stock
1,854 1,909
1,857
1,923 Class B common stock
245 245
245 245 Class C common stock
15
19
16 19
Diluted
earnings per share Class A common stock
$ 0.18
$ 0.71
$ 1.04 $ 1.51
Class B common stock
$ 0.29 $ 1.17
$ 1.71 $ 2.49 Class C common stock
$ 0.72 $ 2.84
$ 4.14
$ 6.04
Diluted weighted-average
sharesoutstanding
Class A common stock
2,406 2,401
2,413
2,416 Class B common stock
245 245
245 245 Class C common stock
15
19
16 19
VISA INC. CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months EndedMarch
31,
2017 2016 (in millions) Operating
Activities Net income
$ 2,500 $ 3,648 Adjustments
to reconcile net income to net cash provided by operating
activities: Client incentives
2,072 1,577 Fair value
adjustment for the Visa Europe put option
— (255 )
Share-based compensation
116 97 Excess tax benefit for
share-based compensation
— (43 ) Depreciation and
amortization of property, equipment, technology and intangible
assets
277 241 Deferred income taxes
1,700 (29 )
Right to recover for covered losses recorded in equity
(163
) — Charitable contribution of Visa Inc. shares
192 —
Other
23 17 Change in operating assets and liabilities:
Settlement receivable
(1,946 ) (6 ) Accounts
receivable
(40 ) (97 ) Client incentives
(2,306 ) (1,912 ) Other assets
(301 )
(397 ) Accounts payable
(83 ) (34 ) Settlement
payable
883 (57 ) Accrued and other liabilities
(35
) 81 Accrued litigation
15 (12 ) Net cash
provided by operating activities
2,904 2,819
Investing Activities Purchases of property, equipment,
technology and intangible assets
(317 ) (250 )
Investment securities, available-for-sale: Purchases
(1,083
) (17,437 ) Proceeds from maturities and sales
3,972
15,860 Acquisition of business, net of cash received
(302
) (14 ) Purchases of / contributions to other investments
(2 ) (9 ) Proceeds / distributions from other
investments
— 4 Net cash provided by (used in)
investing activities
2,268 (1,846 )
Financing
Activities Repurchase of class A common stock
(3,469
) (3,765 ) Dividends paid
(795 ) (676 )
Proceeds from issuance of senior notes
— 15,971 Debt
issuance costs
— (96 ) Payments from litigation escrow
account—U.S. retrospective responsibility plan
— 11 Cash
proceeds from issuance of common stock under employee equity plans
87 49 Restricted stock and performance-based shares settled
in cash for taxes
(66 ) (85 ) Excess tax benefit for
share-based compensation
— 43 Net cash (used
in) provided by financing activities
(4,243 ) 11,452
Effect of exchange rate changes on cash and cash equivalents
(121 ) — Increase in cash and cash equivalents
808 12,425 Cash and cash equivalents at beginning of year
5,619 3,518 Cash and cash equivalents at end
of period
$ 6,427 $ 15,943
Supplemental Disclosure Income taxes paid, net of refunds
$ 1,611 $ 1,501 Interest payments on debt
$
244 $ — Net unrealized gain on currency forward contracts
$ — $ 116 Accruals related to purchases of property,
equipment, technology and intangible assets
$ 37 $ 38
VISA INC.
FISCAL 2017 AND 2016 QUARTERLY RESULTS OF OPERATIONS
(UNAUDITED) Fiscal 2017 Quarter Ended
Fiscal 2016 Quarter Ended
March 31, 2017
December 31,2016
September 30,2016
June 30,2016(1)
March 31,2016
(in millions) Operating Revenues Service revenues $
1,993 $ 1,918 $ 1,768 $ 1,635 $ 1,699 Data processing revenues
1,843 1,892 1,779 1,541 1,473 International transaction revenues
1,469 1,489 1,489 1,084 1,045 Other revenues 203 203 218 209 198
Client incentives (1,031 ) (1,041 ) (993 ) (839 ) (789 )
Net
operating revenues 4,477 4,461
4,261 3,630 3,626
Operating Expenses Personnel 704 571 690 509 528 Marketing
193 218 300 189 186 Network and processing 150 145 161 123 126
Professional fees 83 80 113 138 66 Depreciation and amortization
131 146 141 120 121 General and administrative 406 186 230 246 164
Litigation provision 2 15 1 — 1
Visa Europe Framework Agreement loss
— — — 1,877 —
Total operating
expenses 1,669 1,361 1,636
3,202 1,192 Operating
income 2,808 3,100 2,625
428 2,434
Non-operating (Expense) Income Interest expense (135 ) (140
) (135 ) (131 ) (132 ) Other 29 19 20 125
139
Total non-operating (expense) income
(106 ) (121 ) (115 )
(6 ) 7 Income before income taxes 2,702
2,979 2,510 422 2,441 Income tax provision 2,272 909
579 10 734
Net income $
430 $ 2,070 $
1,931 $ 412 $
1,707
(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
RESULTSFISCAL SECOND QUARTER 2017 and
2016(UNAUDITED)
Adjusted financial results. Our financial results for the three
and six months ended March 31, 2017 and 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.
- 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.
- 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.
- Net unrealized gains on currency
forward contracts. During the second 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 unrealized gains of
$116 million, before tax, in non-operating income. Net of
related tax expense of $35 million, determined by applying
applicable federal and state tax rates, the impact to net income
was $81 million.
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 three and six months ended March 31, 2017 and 2016.
Three Months Ended March 31, 2017
(in millions, exceptpercentages
and per sharedata)
OperatingExpenses
OperatingMargin(1),(2)
Non-operatingIncome(Expense)
IncomeBeforeIncomeTaxes
IncomeTaxProvision
EffectiveIncomeTaxRate(1)
NetIncome
DilutedEarningsPerShare(1)
As reported $ 1,669 63 % $ (106 ) $ 2,702 $ 2,272 84.1 % $ 430 $
0.18
Elimination of deferred taxbalances
— — % — — (1,515 ) 1,515 0.63 Charitable contribution (192 )
4 % — 192 71 121
0.05 As adjusted $ 1,477 67 % $ (106 ) $ 2,894
$ 828 28.6 % $ 2,066 $ 0.86
Six Months Ended March 31,
2017
(in millions, exceptpercentages
and per sharedata)
OperatingExpenses
OperatingMargin(1),(2)
Non-operatingIncome(Expense)
IncomeBeforeIncomeTaxes
IncomeTaxProvision
EffectiveIncomeTaxRate(1)
NetIncome
DilutedEarningsPerShare(1)
As reported $ 3,030 66 % $ (227 ) $ 5,681 $ 3,181 56.0 % $ 2,500 $
1.04
Elimination of deferred taxbalances
— — % — — (1,515 ) 1,515 0.63 Charitable contribution (192 )
2 % — 192 71 121
0.05 As adjusted $ 2,838 68 % $ (227 ) $ 5,873
$ 1,737 29.6 % $ 4,136 $ 1.71
Three Months Ended March
31, 2016
(in millions, exceptpercentages
and per sharedata)
OperatingExpenses
OperatingMargin(1),(2)
Non-operatingIncome(Expense)
IncomeBeforeIncomeTaxes
IncomeTaxProvision
EffectiveIncomeTax
Rate(1)
NetIncome
DilutedEarningsPer
Share(1)
As reported $ 1,192 67 % $ 7 $ 2,441 $ 734
30.1
%
$
1,707
$ 0.71
Net unrealized gains on currencyforward
contracts
— — %
(116
)
(116
)
(35
)
(81
)
(0.03
)
As adjusted $ 1,192 67 %
$
(109
)
$
2,325
$ 699
30.1
%
$
1,626
$ 0.68
Six Months Ended March 31, 2016
(in millions, exceptpercentages
and per sharedata)
OperatingExpenses
OperatingMargin(1),(2)
Non-operatingIncome(Expense)
IncomeBeforeIncomeTaxes
IncomeTaxProvision
EffectiveIncomeTaxRate(1)
NetIncome
DilutedEarningsPerShare(1)
As reported $ 2,361 67 % $ 250 $ 5,080 $ 1,432 28.2 % $ 3,648 $
1.51
Net unrealized gains on currencyforward
contracts
— — % (116 ) (116 ) (35 ) (81 ) (0.03 )
Revaluation of Visa Europe putoption
— — % (255 ) (255 ) —
(255 ) (0.11 ) As adjusted $ 2,361 67 % $ (121 ) $
4,709 $ 1,397 29.7 % $ 3,312 $ 1.37
(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
RESULTSFISCAL 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 periods 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 operating expenses, operating margin, non-operating
income (expense), income before income taxes, income taxes,
effective income tax rate, net income and diluted earnings per
share 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)
(in millions, exceptpercentages
and per sharedata)
OperatingExpenses
Operating Margin(2),(3)
Non-operatingIncome(Expense)
IncomeBeforeIncomeTaxes
IncomeTaxes
EffectiveIncomeTax
Rate(2)
NetIncome
DilutedEarningsPerShare(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 deferredtax liability
— —
%
—
— 88 (88 ) (0.04 )
Acquisition-related costs
(152 ) 1 % — 152 56 96 0.04
Visa Europe FrameworkAgreement loss
(1,877 ) 12 % — 1,877 693 1,184 0.49
Net gains on currency forwardcontracts
— — % (74 ) (74 ) (27 ) (47 ) (0.02 )
Foreign exchange gain on eurodeposits
— — % (145 ) (145 ) (54 ) (91 ) (0.04 )
Revaluation of Visa Europe putoption
— — % (255 ) (255 ) — (255 ) (0.11 ) As
adjusted $ 5,060 66 % $ (345 ) $ 9,677 $ 2,815 29.1 % $ 6,862 $
2.84
Diluted weighted-averageshares
outstanding, asreported
2,414
(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 March 31, 2017, as
well as the prior four quarterly reporting periods and the 12
months ended March 31, 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 March 31, 2017
TotalVolume($
billions)
Growth(NominalUSD)
Growth(ConstantUSD)
PaymentsVolume($
billions)
Growth(NominalUSD)
Growth(ConstantUSD)
PaymentsTransactions(millions)
CashVolume($
billions)
Growth(NominalUSD)
Growth(ConstantUSD)
CashTransactions(millions)
All Visa Credit & Debit Asia Pacific $ 522 2.3 % 3.4 % $
398 5.8 % 7.1 % 5,512 $ 125 (7.5 %) (7.0 %) 837 Canada 57 12.7 %
8.3 % 53 13.4 % 9.0 % 720 5 5.7 % 1.6 % 10 CEMEA 236 15.4 % 7.1 %
73 28.6 % 16.9 % 2,894 163 10.3 % 3.2 % 1,200 LAC 239 17.6 % 11.0 %
96 21.0 % 13.1 % 3,016 144 15.4 % 9.7 % 1,141 US 908 10.3 % 10.3 %
775 11.7 % 11.7 % 14,553 133 2.9 % 2.9 % 930
Europe
458 335 7,211 122 1,004
Visa Inc.
2,421 35.0 % 33.2 % 1,730 38.1 % 37.2 % 33,906 691 27.9 % 24.2 %
5,122
Visa Credit Programs US $ 418 19.9 % 19.9 % $
404 20.7 % 20.7 % 4,856 $ 14 0.2 % 0.2 % 16
International
618 30.2 % 29.2 % 571 28.2 % 27.6 % 8,273 48
60.5 % 51.5 % 226 Visa Inc. 1,037 25.9 % 25.3 % 974 25.0 %
24.7 % 13,129 62 40.9 % 35.4 % 242
Visa Debit
Programs US $ 489 3.2 % 3.2 % $ 371 3.2 % 3.2 % 9,697 $ 118 3.3
% 3.3 % 914
International
895 80.7 % 73.5 % 384 239.0 % 220.9 % 11,079
511 33.7 % 28.9 % 3,965 Visa Inc. 1,384 42.8 % 39.8 % 755
59.7 % 57.6 % 20,776 629 26.7 % 23.2 % 4,880
For the 3
Months Ended December 31, 2016
TotalVolume($
billions)
Growth(NominalUSD)
Growth(ConstantUSD)
PaymentsVolume($
billions)
Growth(NominalUSD)
Growth(ConstantUSD)
PaymentsTransactions(millions)
CashVolume($
billions)
Growth(NominalUSD)
Growth(ConstantUSD)
CashTransactions(millions)
Accounts(millions)
Cards(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 % 3,154 152 3.2 % 6.7 % 1,215 418 454
US 937 11.3 % 11.3 % 804 12.5 % 12.5 % 15,321 134 4.5 % 4.5 % 934
718 862
Europe
490 352 7,622 138 1,112 485
542 Visa Inc. 2,524 33.6 % 34.5 % 1,802 38.1 % 38.7 % 35,360
722 23.5 % 25.0 % 5,493 2,808 3,144
Visa Credit
Programs US $ 444 19.5 % 19.5 % $ 430 20.3 % 20.3 % 5,349 $ 14
(0.1 %) (0.1 %) 16 282 335
International
648 28.5 % 29.9 % 596 26.8 % 28.2 % 8,673 52
51.9 % 52.6 % 259 653 728 Visa Inc. 1,093 24.7
% 25.4 % 1,026 24.0 % 24.8 % 14,022 66 36.5 % 36.9 % 276 935 1,063
Visa Debit Programs US $ 493 4.8 % 4.8 % $ 374 4.8 %
4.8 % 9,972 $ 119 5.0 % 5.0 % 917 436 527
International
939 72.7 % 75.2 % 402 232.3 % 235.0 % 11,366
536 27.0 % 29.0 % 4,300 1,436 1,554 Visa Inc.
1,432 41.2 % 42.3 % 776 62.4 % 62.8 % 21,338 656 22.3 % 23.9 %
5,217 1,872 2,081
For the 3 Months Ended September 30,
2016
TotalVolume($
billions)
Growth(NominalUSD)
Growth(ConstantUSD)
PaymentsVolume($
billions)
Growth(NominalUSD)
Growth(ConstantUSD)
PaymentsTransactions(millions)
CashVolume($
billions)
Growth(NominalUSD)
Growth(ConstantUSD)
CashTransactions(millions)
Accounts(millions)
Cards(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 3.8 % 10.5 % 91 7.1 % 13.6 % 2,993 145 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 % 958
697 835
Europe
646 468 9,581 177 1,421 479
542 Visa Inc. 2,620 41.7 % 43.2 % 1,859 47.0 % 47.2 % 36,090
761 30.1 % 34.1 % 5,793 2,747 3,086
Visa Credit
Programs US $ 424 18.3 % 18.3 % $ 409 18.8 % 18.8 % 5,124 $ 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 % 14,680 84 68.8 % 71.3 % 413 931 1,060
Visa Debit Programs US $ 479 3.4 % 3.4 % $ 359 2.9 %
2.9 % 9,800 $ 120 4.9 % 4.9 % 940 422 507
International
992 85.0 % 92.0 % 435 276.2 % 286.9 % 11,609
557 32.4 % 37.8 % 4,441 1,395 1,519 Visa Inc.
1,470 47.2 % 50.1 % 793 70.9 % 72.1 % 21,410 677 26.6 % 30.6 %
5,380 1,817 2,026
For the 3 Months Ended June 30,
2016
TotalVolume($
billions)
Growth(NominalUSD)
Growth(ConstantUSD)
PaymentsVolume($
billions)
Growth(NominalUSD)
Growth(ConstantUSD)
PaymentsTransactions(millions)
CashVolume($
billions)
Growth(NominalUSD)
Growth(ConstantUSD)
CashTransactions(millions)
Accounts(millions)
Cards(millions)
All Visa Credit & Debit Asia Pacific $ 531 4.3 % 7.3 % $
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 % 18.3 % 2,415 169 (4.3 %) 8.9 % 1,255 331
318 LAC 224 (5.8 %) 10.8 % 86 (3.3 %) 14.4 % 2,859 138 (7.2 %) 8.7
% 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 %
9.0 % 1,349 7.6 % 10.4 % 25,751 584 (3.0 %) 5.8 % 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 % 9.8 % 476 5.0 % 9.9 % 6,623 37
(2.0 %) 8.7 % 159 509 569 Visa Inc. 903 7.2 %
10.3 % 852 7.5 % 10.3 % 11,206 51 1.4 % 9.4 % 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 % 17.1 % 4,448 414
(5.6 %) 5.6 % 3,249 1,044 1,118 Visa Inc.
1,030 1.7 % 7.9 % 497 7.7 % 10.5 % 14,545 533 (3.4 %) 5.5 % 4,204
1,450 1,614
For the 3 Months Ended March 31, 2016
TotalVolume($
billions)
Growth(NominalUSD)
Growth(ConstantUSD)
PaymentsVolume($
billions)
Growth(NominalUSD)
Growth(ConstantUSD)
PaymentsTransactions(millions)
CashVolume($
billions)
Growth(NominalUSD)
Growth(ConstantUSD)
CashTransactions(millions)
Accounts(millions)
Cards(millions)
All Visa Credit & Debit Asia Pacific $ 511 3.2 % 8.8 % $
376 9.6 % 14.1 % 4,745 $ 135 (11.1 %) (3.6 %) 1,017 753 856 Canada
51 (5.1 %) 5.0 % 46 (5.3 %) 4.7 % 659 5 (2.4 %) 8.0 % 11 47 54
CEMEA 205 (3.4 %) 8.4 % 57 4.9 % 17.9 % 2,185 148 (6.2 %) 5.1 %
1,161 330 321 LAC 204 (16.2 %) 7.7 % 79 (15.2 %) 13.1 % 2,799 124
(16.8 %) 4.5 % 1,076 406 439
US
823 10.0 % 10.0 % 694 10.5 % 10.5 % 13,619 129
7.3 % 7.3 % 932 662 794 Visa Inc. 1,793 2.4 %
9.0 % 1,252 7.3 % 11.8 % 24,007 541 (7.4 %) 3.2 % 4,198 2,197 2,465
Visa Credit Programs US $ 349 10.5 % 10.5 % $ 334
10.6 % 10.6 % 4,067 $ 14 8.8 % 8.8 % 16 255 301
International
475 2.5 % 11.3 % 445 3.8 % 12.5 % 6,263 30
(14.0 %) (3.1 %) 157 504 563 Visa Inc. 824 5.8
% 11.0 % 780 6.6 % 11.7 % 10,330 44 (7.7 %) 0.4 % 173 758 863
Visa Debit Programs US $ 474 9.6 % 9.6 % $ 359 10.5 %
10.5 % 9,552 $ 115 7.1 % 7.1 % 916 407 494
International
495 (8.3 %) 5.6 % 113 2.0 % 17.2 % 4,125 382
(10.9 %) 2.5 % 3,109 1,032 1,108 Visa Inc. 969
(0.3 %) 7.5 % 473 8.3 % 12.1 % 13,677 497 (7.4 %) 3.5 % 4,025 1,439
1,602
For the 12 Months Ended March 31, 2017
TotalVolume($
billions)
Growth(NominalUSD)
Growth(ConstantUSD)
PaymentsVolume($
billions)
Growth(NominalUSD)
Growth(ConstantUSD)
PaymentsTransactions(millions)
CashVolume($
billions)
Growth(NominalUSD)
Growth(ConstantUSD)
CashTransactions(millions)
All Visa Credit & Debit Asia Pacific $ 2,128 3.6 % 4.5 %
$ 1,616 7.8 % 8.7 % 21,473 $ 511 (7.8 %) (6.6 %) 3,767 Canada 244
5.9 % 6.4 % 224 6.0 % 6.5 % 3,002 20 4.8 % 5.2 % 43 CEMEA 952 5.5 %
8.6 % 277 16.1 % 17.9 % 10,715 675 1.8 % 5.3 % 4,999 LAC 949 4.9 %
10.2 % 371 8.3 % 13.2 % 12,023 578 2.8 % 8.4 % 4,648
US
3,631 10.2 % 10.2 % 3,096 11.2 % 11.2 % 59,479 536 4.6 % 4.6 %
3,794
Europe (1) 1,594 1,156 24,414
438 3,536 Visa Inc. 9,498 28.6 % 30.1 % 6,740 32.8 %
33.6 % 131,106 2,758 19.3 % 22.4 % 20,788
Visa Credit
Programs US $ 1,677 17.2 % 17.2 % $ 1,618 17.7 % 17.7 % 19,913
$ 59 4.2 % 4.2 % 67
International
2,504 27.7 % 29.3 % 2,300 26.0 % 27.6 % 33,125
205 50.0 % 53.1 % 1,039 Visa Inc. 4,182 23.3 % 24.2 % 3,918
22.5 % 23.3 % 53,037 263 36.6 % 38.6 % 1,106
Visa Debit
Programs US $ 1,954 4.8 % 4.8 % $ 1,477 4.8 % 4.8 % 39,566 $
477 4.6 % 4.6 % 3,727
International
3,362 57.8 % 62.8 % 1,344 187.9 % 193.9 % 38,503
2,018 21.3 % 25.5 % 15,955 Visa Inc. 5,316 33.1 %
35.3 % 2,821 50.4 % 51.2 % 78,069 2,495 17.7 % 20.9 % 19,682
For the 12 Months Ended March 31, 2016
TotalVolume($
billions)
Growth(NominalUSD)
Growth(ConstantUSD)
PaymentsVolume($
billions)
Growth(NominalUSD)
Growth(ConstantUSD)
PaymentsTransactions(millions)
CashVolume($
billions)
Growth(NominalUSD)
Growth(ConstantUSD)
CashTransactions(millions)
Accounts(millions)
Cards(millions)
All Visa Credit & Debit Asia Pacific $ 2,054 2.7 % 10.1
% $ 1,499 7.7 % 15.0 % 18,709 $ 555 (8.8 %) (1.2 %) 4,051 753 856
Canada 230 (8.4 %) 5.4 % 212 (8.5 %) 5.2 % 2,759 19 (6.2 %) 7.7 %
46 47 54 CEMEA 902 (12.5 %) 7.8 % 238 (4.9 %) 15.7 % 7,983 664
(14.9 %) 5.2 % 4,788 330 321 LAC 905 (15.4 %) 9.0 % 342 (15.8 %)
11.9 % 11,011 563 (15.2 %) 7.3 % 4,431 406 439
US
3,296 8.9 % 8.9 % 2,784 9.7 % 9.7 % 54,523 512
5.2 % 5.2 % 3,777 662 794 Visa Inc. 7,388 0.1
% 9.0 % 5,076 5.3 % 11.4 % 94,985 2,312 (9.6 %) 4.0 % 17,092 2,197
2,465
Visa Credit Programs US $ 1,432 10.2 % 10.2 % $
1,375 10.4 % 10.4 % 16,754 $ 56 5.8 % 5.8 % 66 255 301
International
1,961 (0.3 %) 12.2 % 1,825 1.7 % 13.6 % 24,900
136 (21.0 %) (3.4 %) 644 504 563 Visa Inc.
3,393 3.9 % 11.3 % 3,200 5.3 % 12.2 % 41,654 193 (14.6 %) (0.9 %)
711 758 863
Visa Debit Programs US $ 1,865 8.0 % 8.0
% $ 1,409 9.0 % 9.0 % 37,769 $ 456 5.1 % 5.1 % 3,710 407 494
International
2,130 (10.7 %) 6.3 % 467 (4.1 %) 13.9 % 15,562
1,663 (12.4 %) 4.4 % 12,672 1,032 1,108 Visa
Inc. 3,995 (2.8 %) 7.1 % 1,876 5.4 % 10.2 % 53,332 2,119 (9.1 %)
4.5 % 16,382 1,439 1,602
(1)
Europe includes volume and transactions
for the 9 months ended March 31, 2017 only.
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(Constant USD)
Growth(Nominal USD)
Quarter Ended Quarter Ended Sep'16
Dec'16 Mar'17 Sep'16
Dec'16 Mar'17 Visa Inc. -
As Reported 47.2 % 38.7 %
37.2
% 47.0 % 38.1 % 38.1 % excluding co-badge 38.5 % 38.7 %
37.2
% 38.3 % 38.1 % 38.1 % International - As Reported 91.6 %
70.7 % 68.4 % 90.9 % 68.9 % 71.0 % excluding co-badge 72.3 % 70.7 %
68.4 % 71.7 % 68.9 % 71.0 % Europe Normalized (1) 6.8 %
(17.7 %) (17.5 %) (1.2 %) (26.3 %) (25.1 %) excluding co-badge 7.2
% 9.2 % 8.9 % (3.0 %) (4.7 %) (3.0 %)
(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.
Period
Growth(Nominal USD)
Growth(Constant USD)
NormalizedGrowth
(2)(Constant USD)
3 Months
Ended
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 % March 31, 2016 0 % 5 %
12 Months
Ended
March 31, 2017 (1) 104 % 107 % March 31, 2016 (2 %) 5 %
(1)
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.
(2)
Europe is included as part of Visa Inc. effective with the 3 months
ended September 30, 2016.
4. Visa Processed Transactions
The table below represents transactions involving Visa, Visa
Electron, V PAY, Interlink and PLUS cards processed on Visa’s
networks.
Period
ProcessedTransactions(millions)
Growth
NormalizedGrowth
(2)
3 Months
Ended
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 % March 31, 2016 18,475 9 %
12 Months
Ended
March 31, 2017 (1) 99,283 34 % March 31, 2016 73,850 8 %
(1)
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.
(2)
Europe is included as part of Visa Inc. effective with the 3 months
ended September 30, 2016.
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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170420006518/en/
Visa Inc.Investor Relations:Jack Carsky, Joon Huh, or Victoria
Hyde-Dunn, 650-432-7644ir@visa.comorMedia Relations:Nathaniel
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