Performance Driven by Continued Strength in
Payments Volume, Cross-Border Volume and Processed
Transactions
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.
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version on businesswire.com: http://www.businesswire.com/news/home/20170720006149/en/
Visa Inc.Investor Relations:Jack Carsky, Joon Huh, or Victoria
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