Visa Inc. Reports Strong Fiscal Fourth Quarter and Full-Year 2016 Results

10/24/2016


  • GAAP quarterly net income of $1.9 billion or $0.79 per share, including special items
  • GAAP full-year 2016 net income was $6.0 billion or $2.48 per share, including special items
  • Adjusted quarterly net income of $1.9 billion or $0.78 per share, excluding special items
  • Adjusted full-year 2016 net income of $6.9 billion or $2.84 per share, excluding special items

SAN FRANCISCO--(BUSINESS WIRE)--Oct. 24, 2016-- Visa Inc. (NYSE: V) today announced financial results for the Company's fiscal fourth quarter and full-year 2016, ended September 30, 2016. GAAP net income in the fiscal fourth quarter, inclusive of special items, was $1.9 billion or $0.79 per share, an increase of 28% and 28%, respectively, over the prior year's results. GAAP net income for the full-year 2016, inclusive of special items, was $6.0 billion or $2.48 per share, a decrease of 5% and 4%, respectively, over the prior year's results. The full-year 2016 results include fiscal fourth quarter financial results from Visa Europe. 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.

During the fiscal fourth quarter of 2016, the Company recorded the following special items:

  • A charge of $110 million (pretax) for severance costs; and
  • Non-cash and non-recurring $88 million gain due to the remeasurement of a deferred tax liability recorded upon the acquisition of Visa Europe to reflect a newly announced tax rate change in the United Kingdom.

Excluding these special items, adjusted net income in the fiscal fourth quarter was $1.9 billion or $0.78 per share, an increase of 27% and 27%, respectively, over the prior year's results1. Adjusted net income for the full-year 2016 was $6.9 billion or $2.84 per share, an increase of 7% and 8%, respectively, over the prior year's adjusted results. The Company's full-year 2016 adjusted financial results excluded special items related to the acquisition of Visa Europe incurred during the first three quarters and the above mentioned special items incurred in the fourth quarter.

Net operating revenue in the fiscal fourth quarter 2016 was $4.3 billion, an increase of 19%, driven by the inclusion of Europe and continued growth in payments volume and processed transactions. Net operating revenue in the fiscal full-year 2016 was $15.1 billion, an increase of 9%, driven by the inclusion of Europe and continued growth in payments volume and processed transactions. Exchange rate shifts versus the prior year negatively impacted reported net operating revenue growth by approximately 3 percentage points.

"We continue to deliver healthy earnings growth in the face of continued, but abating headwinds. We have begun to see the benefits from our acquisition of Visa Europe and strong cost discipline helped our results. At the same time, we are unwavering in our commitment to invest in client partnership opportunities and the further build out of our digital payments capabilities," said Charlie Scharf, Chief Executive Officer of Visa Inc.

"As we enter fiscal 2017, we are positioned well as revenue headwinds will continue to ease, we will continue to see the benefits from Visa Europe in our results, and our strong client franchise continues to grow," added Scharf.

1 The Company did not report adjusted results for the three months ended September 30, 2015.

Fiscal Fourth Quarter 2016 Financial Highlights:

Payments volume growth, excluding Visa Europe and on a constant dollar basis, for the three months ended June 30, 2016, on which fiscal fourth quarter service revenue is recognized, was 10% over the prior year at $1.3 trillion.

Payments volume growth, including Visa Europe and on a constant dollar basis, for the three months ended September 30, 2016, was 47% over the prior year at $1.9 trillion.

Cross-border volume growth, including Visa Europe and on a constant dollar basis, was 149% for the three months ended September 30, 2016.

Total processed transactions, which represent transactions processed by Visa (including Visa Europe), for the three months ended September 30, 2016, were 25.9 billion, a 41% increase over the prior year.

Fiscal fourth quarter 2016 service revenues were $1.8 billion, an increase of 8% 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 36% over the prior year to $1.5 billion. Other revenues were $218 million, an increase of 1% over the prior year. Client incentives, which are a contra revenue item, were $993 million and represent 18.9% of gross revenues.

GAAP operating expenses were $1.6 billion for the fiscal fourth quarter 2016, a 27% increase over the prior year's results, primarily driven by the inclusion of Europe and increases in personnel expenses due to a charge of $110 million for severance costs. Adjusted operating expenses, which exclude the special item, were $1.5 billion, an 18% increase over the prior year.

GAAP effective income tax rate was 23.1% for the quarter ended September 30, 2016 and included a $38 million benefit related to the charge for severance costs of $110 million and a non-cash and non-recurring $88 million gain upon the remeasurement of a deferred tax liability recorded upon the acquisition of Visa Europe to reflect a newly announced tax rate change in the United Kingdom. Excluding the tax impact from the special items, the adjusted effective income tax rate was 26.9% for the fiscal fourth quarter.

Cash, cash equivalents, and available-for-sale investment securities were $12.8 billion at September 30, 2016.

The weighted-average number of diluted shares of class A common stock outstanding was 2.44 billion for the quarter ended September 30, 2016.

Summary Table of Adjustments to Earnings (1):

    Three Months Ended
    September 30, 2016
(in millions, except percentages and per share data)  

Operating
Expenses

 

Operating
Margin(2)

 

Income
Before
Income
Taxes

 

Income
Taxes

 

Effective
Income Tax
Rate (2)

 

Net
Income

 

Diluted
Earnings per
Share(2)

As reported   $ 1,636       62 %     $ 2,510   $ 579   23.1 %   $ 1,931     $ 0.79  
Severance costs     (110 )     3 %       110     38         72       0.03  
Remeasurement of deferred tax liability                       88         (88 )     (0.04 )
As adjusted   $ 1,526       64 %     $ 2,620   $ 705   26.9 %   $ 1,915     $

0.78

 
Diluted weighted-average shares outstanding, as reported                                 2,440  

(1) The Company did not report adjusted results for the three months ended September 30, 2015.
(2) Figures in the table may not recalculate exactly due to rounding. Operating margin, effective income tax rate and diluted earnings per share figures are calculated based on unrounded numbers.

Fiscal Full-Year 2016 Financial Highlights:

For the fiscal full-year 2016, service revenues were $6.7 billion, an increase of 7% over the prior year. Data processing revenues rose 13% over the prior year to $6.3 billion. International transaction revenues grew 14% over the prior year to $4.6 billion. Other revenues were $823 million, flat over the prior year. Client incentives were $3.4 billion and represent 18.4% of gross revenues.

GAAP operating expenses were $7.2 billion for the twelve months ended September 30, 2016, a 49% increase over the prior year's results, primarily related to increases in personnel, network and processing expenses, and special items incurred in all four fiscal quarters primarily related to the acquisition of Visa Europe.

Adjusted operating expenses, which exclude special items incurred in all four fiscal quarters, were $5.1 billion, an increase of 5% over the prior year's results.

GAAP effective income tax rate was 25.2% for the twelve months ended September 30, 2016. Adjusted effective income tax rate, excluding the special items related to the acquisition of Visa Europe, severance costs and deferred tax liability remeasurement described above, was 29.1%.

The weighted-average number of diluted shares of class A common stock outstanding was 2.41 billion for the full-year.

Summary Table of Adjustments to Earnings (1):

     
   

Twelve Months Ended September 30, 2016

(in millions, except percentages and per share data)

 

Operating
Expenses

 

Operating
Margin (2)

 

Non-
operating
Income
(Expense)

 

Income
Before
Income
Taxes

 

Income
Taxes

 

Effective
Income Tax
Rate (2)

 

Net Income

 

Diluted
Earnings
per 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  
Diluted weighted-average shares outstanding, as reported                             2,414  

(1) Refer to the accompanying financial tables for a reconciliation of adjusted results for the twelve months ended September 30, 2015.
(2) Figures in the table may not recalculate exactly due to rounding. Operating margin, effective income tax rate and diluted earnings per share figures are calculated based on unrounded numbers.

Notable Events:

During the three months ended September 30, 2016, the Company repurchased 20.5 million shares of class A common stock, at an average price of $80.76 per share, using $1.7 billion of cash on hand. During the twelve months ended September 30, 2016, the Company repurchased a total of 92.1 million shares of class A common stock, at an average price of $77.13 per share, using $7.1 billion of cash on hand. At September 30, 2016, the Company had $5.7 billion of remaining funds, authorized by the board of directors, available for share repurchase under the current programs.

On October 17, 2016, 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 December 6, 2016, to all holders of record of the Company's common and preferred stock as of November 18, 2016.

In addition, on October 17, 2016, the Company announced that Charlie Scharf has resigned as chief executive officer effective December 1, 2016, and the board of directors appointed current board member Alfred F. Kelly, Jr. to become CEO effective December 1, 2016.

Financial Outlook for Fiscal Full-Year 2017:

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

  • Annual net revenue growth: 16% to 18% range on a nominal dollar basis, including 1.0 to 1.5 ppts of negative foreign currency impact;
  • Client incentives as a percent of gross revenues: 20.5% to 21.5% range;
  • Annual operating margin: Mid 60s;
  • Effective tax rate: Low 30s; and
  • Annual diluted class A common stock earnings per share growth: Low 30s on a GAAP nominal dollar basis and mid-teens on an adjusted, non-GAAP nominal dollar basis (see note below), both including 1.5 to 2.0 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. 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.

Fiscal Fourth Quarter 2016 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 https://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 https://investor.visa.com.

Non-GAAP Financial Information:

The Company has presented certain financial data that are considered non-GAAP financial measures that are reconciled to their most directly comparable GAAP financial measures in the accompanying tables. Management believes that the presentation of adjusted net income and adjusted earnings per share facilitate a clearer understanding of Visa's operating performance and provides a meaningful comparison of its results between periods. Refer to the accompanying financial tables for further details and a reconciliation of the non-GAAP measures presented.

Visa's management uses non-GAAP financial measures to evaluate its ongoing operations in relation to historical results and for internal planning and forecasting purposes. The presentation of non-GAAP measures should not be considered in isolation or as a substitute for Visa's related financial results prepared in accordance with GAAP.

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 usa.visa.com/about-visa, 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, 2015, 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)
         
   

September 30,
2016

 

September 30,
2015

    (in millions, except par value data)
Assets        
Cash and cash equivalents   $ 5,619     $ 3,518  
Restricted cash—litigation escrow     1,027       1,072  
Investment securities:        
Trading     71       66  
Available-for-sale     3,248       2,431  
Settlement receivable     1,467       408  
Accounts receivable     1,041       847  
Customer collateral     1,001       1,023  
Current portion of client incentives     284       303  
Prepaid expenses and other current assets     555       353  
Total current assets     14,313       10,021  
Investment securities, available-for-sale     3,931       3,384  
Client incentives     448       110  
Property, equipment and technology, net     2,150       1,888  
Other assets     893       778  
Intangible assets, net     27,234       11,361  
Goodwill     15,066       11,825  
Total assets   $ 64,035     $ 39,367  
Liabilities        
Accounts payable   $ 203     $ 127  
Settlement payable     2,084       780  
Customer collateral     1,001       1,023  
Accrued compensation and benefits     673       503  
Client incentives     1,976       1,049  
Accrued liabilities     1,128       849  
Accrued litigation     981       1,024  
Total current liabilities     8,046       5,355  
Long-term debt     15,882        
Deferred tax liabilities     4,808       3,273  
Deferred purchase consideration     1,225        
Other liabilities     1,162       897  
Total liabilities     31,123       9,525  
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 September 30, 2016     2,516        
Series C convertible participating preferred stock, 3 shares issued and outstanding at September 30, 2016     3,201        
Class A common stock, $0.0001 par value, 2,001,622 shares authorized, 1,871 and 1,950 shares issued and outstanding at September 30, 2016 and 2015, respectively            
Class B common stock, $0.0001 par value, 622 shares authorized, 245 shares issued and outstanding at September 30, 2016 and 2015            
Class C common stock, $0.0001 par value, 1,097 shares authorized, 17 and 20 shares issued and outstanding at September 30, 2016 and 2015, respectively            
Treasury stock     (170 )      
Right to recover for covered losses     (34 )      
Additional paid-in capital     17,395       18,073  
Accumulated income     10,462       11,843  

Accumulated other comprehensive loss, net:

       
Investment securities, available-for-sale     36       5  
Defined benefit pension and other postretirement plans     (225 )     (161 )
Derivative instruments classified as cash flow hedges     (50 )     83  
Foreign currency translation adjustments     (219 )     (1 )
Total accumulated other comprehensive loss, net     (458 )     (74 )
Total equity     32,912       29,842  
Total liabilities and equity   $ 64,035     $ 39,367  
 
VISA INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
   

Three Months Ended
September 30,

 

Twelve Months Ended
September 30,

   

2016 (1)

 

2015

 

2016 (1)

 

2015

    (in millions, except per share data)
Operating Revenues                
Service revenues   $ 1,768     $ 1,637     $ 6,747     $ 6,302  
Data processing revenues     1,779       1,429       6,272       5,552  
International transaction revenues     1,489       1,091       4,649       4,064  
Other revenues     218       216       823       823  
Client incentives     (993 )     (802 )     (3,409 )     (2,861 )
Total operating revenues     4,261       3,571       15,082       13,880  
                 
Operating Expenses                
Personnel     690       521       2,226       2,079  
Marketing     300       253       869       872  
Network and processing     161       134       538       474  
Professional fees     113       107       389       336  
Depreciation and amortization     141       119       502       494  
General and administrative     230       143       796       547  
Litigation provision     1       11       2       14  
Visa Europe Framework Agreement loss                 1,877        
Total operating expenses     1,636       1,288       7,199       4,816  
Operating income     2,625       2,283       7,883       9,064  
                 
Non-operating (Expense) Income                
Interest expense     (135 )           (427 )     (3 )
Other     20             556       (66 )
Non-operating (expense) income     (115 )           129       (69 )
Income before income taxes     2,510       2,283       8,012       8,995  
Income tax provision     579       771       2,021       2,667  
Net income   $ 1,931     $ 1,512     $ 5,991     $ 6,328  
                 
Basic earnings per share                
Class A common stock   $ 0.79     $ 0.62     $ 2.49     $ 2.58  
Class B common stock   $ 1.31     $ 1.02     $ 4.10     $ 4.26  
Class C common stock   $ 3.17     $ 2.48     $ 9.94     $ 10.33  
                 
Basic weighted-average shares outstanding                
Class A common stock     1,878       1,948       1,906       1,954  
Class B common stock     245       245       245       245  
Class C common stock     17       19       19       22  
                 
Diluted earnings per share                
Class A common stock   $ 0.79     $ 0.62     $ 2.48     $ 2.58  
Class B common stock   $ 1.30     $ 1.02     $ 4.09     $ 4.25  
Class C common stock   $ 3.16     $ 2.48     $ 9.93     $ 10.30  
                 
Diluted weighted-average shares outstanding                
Class A common stock     2,440       2,440       2,414       2,457  
Class B common stock     245       245       245       245  
Class C common stock     17       19       19       22  

(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 statements of operations for the year ended September 30, 2016 includes Visa Europe's financial results for the three months ended September 30, 2016.
 
VISA INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
    For the Years Ended September 30,
      2016      

2015

     

2014

 
    (in millions)
Operating Activities            
Net income   $ 5,991     $ 6,328     $ 5,438  
Adjustments to reconcile net income to net cash provided by operating activities:            
Client incentives     3,409       2,861       2,592  
Fair value adjustment for the Visa Europe put option     (255 )     110        
Share-based compensation     221       187       172  
Excess tax benefit for share-based compensation     (63 )     (84 )     (90 )
Depreciation and amortization of property, equipment, technology and intangible assets     502       494       435  
Deferred income taxes     (764 )     195       (580 )
Right to recover for covered losses recorded in equity     (9 )            
Litigation provision     4       14       453  
Other     64       24       37  
Change in operating assets and liabilities:            
Settlement receivable     391       378       13  
Accounts receivable     (65 )     (19 )     (53 )
Client incentives     (3,508 )     (2,970 )     (2,395 )
Other assets     (315 )     (41 )     (379 )
Accounts payable     43       (13 )     (56 )
Settlement payable     (302 )     (552 )     107  
Accrued and other liabilities     277       118       513  
Accrued litigation     (47 )     (446 )     998  
Net cash provided by operating activities     5,574       6,584       7,205  
             
Investing Activities            
Purchases of property, equipment, technology and intangible assets     (523 )     (414 )     (553 )
Proceeds from sales of property, equipment and technology           10        
Investment securities, available-for-sale:            
Purchases     (28,004 )     (2,850 )     (2,572 )
Proceeds from maturities and sales     26,697       1,925       2,342  
Acquisitions, net of $2.8 billion cash received from Visa Europe     (9,082 )     (93 )     (149 )
Purchases of / contributions to other investments     (10 )     (25 )     (9 )
Proceeds / distributions from other investments     6       12        
Net cash used in investing activities     (10,916 )     (1,435 )     (941 )
             
Financing Activities            
Repurchase of class A common stock     (6,987 )     (2,910 )     (4,118 )
Treasury stock—class C common stock     (170 )            
Dividends paid     (1,350 )     (1,177 )     (1,006 )
Proceeds from issuance of senior notes     15,971              
Debt issuance costs     (98 )            
Deposit into litigation escrow account—U.S. retrospective responsibility plan                 (450 )
Payments from (return to) litigation escrow account—U.S. retrospective responsibility plan     45       426       (999 )
Cash proceeds from issuance of common stock under employee equity plans     95       82       91  
Restricted stock and performance-based shares settled in cash for taxes     (92 )     (108 )     (86 )
Excess tax benefit for share-based compensation     63       84       90  
Net cash provided by (used in) financing activities     7,477       (3,603 )     (6,478 )
Effect of exchange rate changes on cash and cash equivalents     (34 )     1       (1 )
Increase (decrease) in cash and cash equivalents     2,101       1,547       (215 )
Cash and cash equivalents at beginning of year     3,518       1,971       2,186  
Cash and cash equivalents at end of year   $ 5,619     $ 3,518     $ 1,971  
             
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   $ 2,842     $ 2,486     $ 2,656  
Interest payments on debt   $ 244     $     $  
Accruals related to purchases of property, equipment, technology and intangible assets   $ 42     $ 81     $ 62  
Right to recover for covered losses related to Visa Europe acquisition   $ 34     $     $  
 
VISA INC.
FISCAL 2016 AND 2015 QUARTERLY RESULTS OF OPERATIONS
(UNAUDITED)
 
    Fiscal 2016 Quarter Ended  

Fiscal 2015
Quarter Ended

   

September 30,
2016 (1)

 

June 30,
2016 (1)

 

March 31,
2016

 

December 31,
2015

 

September 30,
2015

    (in millions)
Operating Revenues                    
Service revenues   $ 1,768   $ 1,635   $ 1,699   $ 1,645   $ 1,637
Data processing revenues   1,779   1,541   1,473   1,479   1,429
International transaction revenues   1,489   1,084   1,045   1,031   1,091
Other revenues   218   209   198   198   216
Client incentives   (993)   (839)   (789)   (788)   (802)
Total operating revenues   4,261   3,630   3,626   3,565   3,571
                     
Operating Expenses                    
Personnel   690   509   528   499   521
Marketing   300   189   186   194   253
Network and processing   161   123   126   128   134
Professional fees   113   138   66   72   107
Depreciation and amortization   141   120   121   120   119
General and administrative   230   246   164   156   143
Litigation provision   1     1     11
Visa Europe Framework Agreement loss     1,877      
Total operating expenses   1,636   3,202   1,192   1,169   1,288
Operating income   2,625   428   2,434   2,396   2,283
                     
Non-operating (Expense) Income                    
Interest expense   (135)   (131)   (132)   (29)  
Other   20   125   139   272  
Non-operating (expense) income   (115)   (6)   7   243  
Income before income taxes   2,510   422   2,441   2,639   2,283
Income tax provision   579   10   734   698   771
Net income   $ 1,931   $ 412   $ 1,707   $ 1,941   $ 1,512

(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 statements of operations for the three months ended September 30, 2016 includes Visa Europe's financial results.

VISA INC.
RECONCILIATION OF NON-GAAP FINANCIAL RESULTS
(UNAUDITED)

Our financial results during the three and 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 and the third quarter of fiscal 2015, we recorded a decrease of $255 million and an increase of $110 million, respectively, in the fair value of the Visa Europe put option, resulting in the recognition of non-cash income and expense in other non-operating income. These amounts are not subject to income tax and therefore have 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 tables reconcile our as-reported financial measures calculated in accordance with U.S. GAAP, to the respective non-GAAP adjusted financial measures for the three and twelve months ended September 30, 2016 and the twelve months ended September 30, 2015. There were no comparable adjustments recorded during the three months ended September 30, 2015.

    Three Months Ended September 30, 2016 (1)
(in millions, except percentages and per share data)  

Operating
Expenses

 

Operating
Margin (2),(3)

 

Non-operating
(Expense)
Income

 

Income Before
Income Taxes

  Income Taxes  

Effective
Income
Tax Rate (2)

  Net Income  

Diluted
Earnings Per
Share (2)

As reported   $ 1,636       62 %   $ (115 )   $ 2,510     $ 579     23.1 %   $ 1,931     $ 0.79  
Severance cost     (110 )     3 %           110       38           72       0.03  
Remeasurement of deferred tax liability           %                 88           (88 )     (0.04 )
As adjusted   $ 1,526       64 %   $ (115 )   $ 2,620     $ 705     26.9 %   $ 1,915     $ 0.78  
Diluted weighted-average shares outstanding, as reported                             2,440  
                                 
    Twelve Months Ended September 30, 2016 (1)
(in millions, except percentages and per share data)  

Operating
Expenses

 

Operating
Margin (2),(3)

 

Non-operating
Income
(Expense)

 

Income Before
Income Taxes

  Income Taxes  

Effective
Income Tax
Rate (2)

  Net Income  

Diluted
Earnings Per
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  
Diluted weighted-average shares outstanding, as reported                             2,414  
                                 
    Twelve Months Ended September 30, 2015                
(in millions, except per share data)  

Non-operating
(Expense)
Income

 

Income Before
Income Taxes

  Net Income  

Diluted
Earnings Per
Share (2)

             
As reported   $ (69 )   $ 8,995     $ 6,328     $ 2.58                  
Revaluation of Visa Europe put option     110       110       110       0.04                  
As adjusted   $ 41     $ 9,105     $ 6,438     $ 2.62                  
Diluted weighted-average shares outstanding, as reported             2,457                  

(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 statements 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 and diluted earnings per share figures are calculated based on unrounded numbers.

(3)

 

Operating margin is calculated as operating income divided by total operating revenues

     

Operational Performance Data

The tables below provide information regarding the available operational results for the 3 months ended September 30, 2016, as well as the prior four quarterly reporting periods and the 12 months ended September 30, 2016 and 2015, for cards carrying the Visa, Visa Electron, V PAY and Interlink brands. Sections 1-3 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 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

    ($ billions)  

USD)

 

USD)

 

($ billions)

 

USD)

 

USD)

 

(millions)

 

($ billions)

 

USD)

 

USD)

 

(millions)

                                             
All Visa Credit & Debit                                            
Asia Pacific   $535   4.9%   3.7%   $406   9.4%   7.8%   5,220   $128   -7.2%   -7.4%   983
Canada   62   5.4%   5.3%   57   5.4%   5.3%   759   5   5.4%   5.3%   11
CEMEA   237   2.4%   7.5%   69   12.7%   17.4%   2,582   169   -1.3%   4.0%   1,235
LAC   236   3.8%   10.4%   91   7.1%   13.6%   2,992   145   1.9%   8.6%   1,165
US   902   9.8%   9.8%   767   10.7%   10.7%   14,899   135   4.8%   4.8%   954

Europe

  643           467           9,569   176           1,407
Visa Inc.   2,614   41.4%   42.9%   1,857   46.9%   47.1%   36,022   757   29.6%   33.5%   5,755
                                             
Visa Credit Programs                                            
US   $424   18.2%   18.2%   $409   18.7%   18.7%   5,122   $15   6.1%   6.1%   18

International

  725   47.6%   47.4%   656   44.0%   43.6%   9,540   68   94.0%   98.1%   394
Visa Inc.   1,149   35.2%   35.1%   1,065   33.1%   32.9%   14,661   84   68.7%   71.2%   412
                                             
Visa Debit Programs                                            
US   $478   3.2%   3.2%   $358   2.7%   2.7%   9,777   $120   4.7%   4.7%   936

International

  988   84.2%   91.2%   433   275.3%   285.9%   11,583   554   31.7%   37.1%   4,407
Visa Inc.   1,465   46.7%   49.6%   792   70.6%   71.7%   21,361   674   25.9%   29.9%   5,343
     
    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%   7.3%   $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   223   -5.8%   10.8%   86   -3.3%   14.4%   2,871   138   -7.2%   8.8%   1,127   419   456

US

  883   9.1%   9.1%   749   9.7%   9.7%   14,681   134   5.9%   5.9%   972   678   851
Visa Inc.   1,933   4.2%   9.0%   1,349   7.6%   10.4%   25,763   584   -3.0%   5.8%   4,379   2,240   2,549
                                                     
Visa Credit Programs                                                    
US   $390   10.9%   10.9%   $376   10.8%   10.8%   4,583   $15   11.0%   11.0%   17   272   355

International

  513   4.5%   9.8%   476   5.0%   9.9%   6,638   37   -2.0%   8.7%   159   511   572
Visa Inc.   903   7.2%   10.3%   852   7.5%   10.3%   11,221   51   1.4%   9.4%   176   783   927
                                                     
Visa Debit Programs                                                    
US   $493   7.7%   7.7%   $374   8.5%   8.5%   10,099   $119   5.3%   5.3%   955   406   496

International

  537   -3.3%   8.0%   123   5.4%   17.1%   4,444   413   -5.6%   5.6%   3,248   1,051   1,126
Visa Inc.   1,030   1.7%   7.9%   497   7.7%   10.5%   14,543   532   -3.4%   5.5%   4,203   1,457   1,622
                                                     
Europe   654           479           9,350   175           1,416   472   537
     
    For the 3 Months Ended March 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   $511   3.2%   8.9%   $376   9.6%   14.4%   4,745   $135   -11.1%   -3.8%   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%   17.3%   2,185   148   -6.2%   5.3%   1,161   330   321
LAC   204   -16.1%   9.1%   79   -15.2%   15.0%   2,799   124   -16.8%   5.6%   1,077   417   451

US

  823   10.0%   10.0%   694   10.5%   10.5%   13,622   129   7.3%   7.3%   932   662   827
Visa Inc.   1,793   2.4%   9.3%   1,252   7.3%   12.0%   24,010   541   -7.4%   3.4%   4,198   2,208   2,510
                                                     
Visa Credit Programs                                                    
US   $349   10.5%   10.5%   $335   10.6%   10.6%   4,067   $14   8.8%   8.8%   16   255   333

International

  475   2.5%   11.9%   445   3.8%   13.1%   6,263   30   -14.0%   -2.9%   157   506   566
Visa Inc.   824   5.8%   11.3%   780   6.6%   12.0%   10,330   44   -7.7%   0.6%   173   761   899
                                                     
Visa Debit Programs                                                    
US   $474   9.6%   9.6%   $360   10.5%   10.5%   9,555   $115   7.1%   7.1%   916   407   494

International

  495   -8.3%   5.7%   113   2.0%   17.2%   4,125   382   -10.9%   2.7%   3,109   1,040   1,116
Visa Inc.   969   -0.3%   7.6%   473   8.3%   12.0%   13,680   497   -7.3%   3.7%   4,025   1,447   1,610
     
    For the 3 Months Ended December 31, 2015
    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   $524   2.5%   10.4%   $387   7.8%   15.6%   4,900   $137   -10.0%   -2.1%   1,003   745   840
Canada   59   -10.7%   5.2%   55   -10.9%   4.9%   723   4   -8.3%   8.0%   11   47   54
CEMEA   228   -13.5%   6.1%   60   -6.8%   12.6%   2,099   168   -15.7%   4.0%   1,236   336   326
LAC   237   -17.0%   10.2%   90   -17.4%   14.2%   2,918   147   -16.8%   7.9%   1,174   416   451

US

  842   9.1%   9.1%   714   9.7%   9.7%   13,980   128   5.8%   5.8%   936   641   813
Visa Inc.   1,890   -0.4%   9.1%   1,306   4.9%   11.6%   24,620   584   -10.6%   3.8%   4,360   2,185   2,483
                                                     
Visa Credit Programs                                                    
US   $372   9.1%   9.1%   $357   9.1%   9.1%   4,390   $14   8.0%   8.0%   17   249   328

International

  505   -1.2%   12.3%   470   0.7%   13.7%   6,506   34   -20.8%   -4.0%   164   507   561
Visa Inc.   876   2.9%   10.9%   828   4.2%   11.7%   10,897   48   -14.0%   -0.8%   181   756   889
                                                     
Visa Debit Programs                                                    
US   $470   9.1%   9.1%   $357   10.2%   10.2%   9,590   $114   5.6%   5.6%   919   393   484

International

  543   -11.8%   6.3%   121   -4.0%   15.3%   4,134   422   -13.8%   3.9%   3,260   1,036   1,110
Visa Inc.   1,014   -3.2%   7.6%   478   6.3%   11.5%   13,723   536   -10.3%   4.3%   4,179   1,429   1,594
     
    For the 3 Months Ended September 30, 2015
    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   $510   0.7%   10.7%   $372   5.5%   15.7%   4,670   $138   -10.3%   -0.9%   1,029   738   835
Canada   58   -12.0%   5.2%   54   -12.1%   5.1%   698   5   -11.3%   6.0%   12   43   50
CEMEA   232   -17.1%   9.3%   61   -9.8%   16.9%   1,915   171   -19.4%   6.8%   1,195   333   321
LAC   227   -17.5%   9.2%   85   -18.1%   11.5%   2,706   142   -17.2%   7.9%   1,093   415   450

US

  822   8.7%   8.7%   693   9.7%   9.7%   13,655   129   3.9%   3.9%   958   623   796
Visa Inc.   1,849   -1.8%   9.3%   1,264   3.9%   11.6%   23,644   585   -12.3%   4.4%   4,286   2,152   2,452
                                                     
Visa Credit Programs                                                    
US   $359   9.8%   9.8%   $345   10.1%   10.1%   4,221   $14   2.8%   2.8%   17   244   323

International

  491   -2.8%   13.2%   456   -0.4%   14.6%   6,214   35   -25.6%   -2.9%   164   499   557
Visa Inc.   850   2.2%   11.7%   800   3.9%   12.7%   10,435   50   -19.1%   -1.3%   181   743   880
                                                     
Visa Debit Programs                                                    
US   $463   7.9%   7.9%   $349   9.2%   9.2%   9,435   $114   4.1%   4.1%   941   380   473

International

  536   -13.9%   6.7%   116   -9.0%   12.3%   3,774   421   -15.1%   5.2%   3,165   1,030   1,099
Visa Inc.   999   -5.0%   7.3%   464   4.0%   9.9%   13,209   535   -11.6%   5.0%   4,105   1,410   1,572
     
    For the 12 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

    ($ billions)  

USD)

 

USD)

 

($ billions)

 

USD)

 

USD)

 

(millions)

 

($ billions)

 

USD)

 

USD)

 

(millions)

                                             
All Visa Credit & Debit                                            
Asia Pacific   $2,101   3.7%   7.5%   $1,563   8.7%   11.9%   19,921   $538   -8.4%   -3.4%   4,017
Canada   234   -2.6%   5.6%   215   -2.8%   5.4%   2,881   19   -0.4%   7.7%   45
CEMEA   903   -4.4%   8.3%   249   3.7%   16.4%   9,281   654   -7.2%   5.5%   4,887
LAC   900   -9.3%   10.2%   346   -8.0%   14.2%   11,580   554   -10.2%   7.7%   4,542
US   3,450   9.5%   9.5%   2,925   10.1%   10.1%   57,183   526   5.9%   5.9%   3,794

Europe

  643           467           9,569   176           1,407
Visa Inc.   8,230   11.9%   18.0%   5,764   16.9%   20.8%   110,416   2,466   1.8%   11.9%   18,692
                                             
Visa Credit Programs                                            
US   $1,535   12.3%   12.3%   $1,477   12.4%   12.4%   18,162   $59   8.4%   8.4%   68

International

  2,217   13.4%   21.0%   2,048   13.5%   20.6%   28,947   169   12.4%   25.7%   874
Visa Inc.   3,752   12.9%   17.3%   3,525   13.0%   17.0%   47,109   228   11.3%   20.7%   942
                                             
Visa Debit Programs                                            
US   $1,915   7.3%   7.3%   $1,448   7.9%   7.9%   39,021   $467   5.6%   5.6%   3,726

International

  2,563   14.1%   28.6%   791   68.5%   88.7%   24,286   1,772   -0.3%   12.6%   14,025
Visa Inc.   4,478   11.1%   18.5%   2,239   23.6%   27.1%   63,307   2,239   0.9%   11.0%   17,751
     
    For the 12 Months Ended September 30, 2015
    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   $2,025   2.9%   9.5%   $1,438   6.0%   13.3%   17,343   $587   -4.2%   1.0%   3,991   738   835
Canada   240   -5.5%   6.7%   221   -5.7%   6.6%   2,650   19   -4.0%   8.6%   46   43   50
CEMEA   945   -13.6%   10.9%   240   -5.3%   19.2%   6,929   705   -16.1%   8.4%   4,724   333   321
LAC   993   -7.9%   11.3%   375   -8.0%   12.2%   10,514   617   -7.8%   10.8%   4,336   415   450

US

  3,152   8.6%   8.6%   2,655   9.5%   9.5%   51,723   496   4.3%   4.3%   3,714   623   796
Visa Inc.   7,354   0.8%   9.4%   4,930   5.4%   11.0%   89,158   2,424   -7.4%   6.0%   16,810   2,152   2,452
                                                     
Visa Credit Programs                                                    
US   $1,367   11.7%   11.7%   $1,313   11.9%   11.9%   15,874   $54   6.7%   6.7%   65   244   323

International

  1,955   -0.1%   11.9%   1,805   2.3%   13.3%   23,433   150   -22.3%   -2.8%   649   499   557
Visa Inc.   3,323   4.4%   11.8%   3,118   6.2%   12.7%   39,307   204   -16.2%   -0.2%   714   743   880
                                                     
Visa Debit Programs                                                    
US   $1,784   6.3%   6.3%   $1,342   7.1%   7.1%   35,848   $442   4.0%   4.0%   3,649   380   473

International

  2,247   -7.8%   8.4%   470   -3.8%   12.1%   14,003   1,777   -8.8%   7.4%   12,448   1,030   1,099
Visa Inc.   4,031   -2.0%   7.4%   1,812   4.1%   8.3%   49,851   2,220   -6.5%   6.6%   16,097   1,410   1,572

2. 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)

         

3 Months Ended

       
Sep 30, 2016   146%   149%
Jun 30, 2016   2%   5%
Mar 31, 2016   0%   5%
Dec 31, 2015   -4%   4%
Sep 30, 2015   -4%   5%
         

12 Months Ended

       
Sep 30, 2016   37%   41%
Sep 30, 2015   0%   7%
         

3. Visa Processed Transactions

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

Period  

Processed
Transactions
(millions)

  Growth
         

3 Months Ended

       
Sep 30, 2016   25,921   41%
Jun 30, 2016   19,778   10%
Mar 31, 2016   18,475   9%
Dec 31, 2015   18,986   8%
Sep 30, 2015   18,365   8%

 

       

12 Months Ended

       
Sep 30, 2016   83,159   17%
Sep 30, 2015   70,968   9%
         

Footnote

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

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

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

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

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

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

 

Source: Visa Inc.

Visa Inc.
Investor Relations:
Jack Carsky or Victoria Hyde-Dunn, 650-432-7644
ir@visa.com
or
Media Relations:
Connie Kim, 212-521-3962
globalmedia@visa.com