þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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26-0267673
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(State or other jurisdiction
of incorporation or organization)
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(IRS Employer
Identification No.)
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P.O. Box 8999
San Francisco, California
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94128-8999
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(Address of principal executive offices)
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(Zip Code)
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Class A common stock, par value $0.0001 per share
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New York Stock Exchange
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(Title of each Class)
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(Name of each exchange on which registered)
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Large accelerated filer
þ
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Accelerated filer
o
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Smaller reporting company
o
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Non-accelerated filer
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(Do not check if a smaller reporting company)
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Emerging growth company
o
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Page
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Item 1
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Item 1A
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Item 1B
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Item 2
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Item 3
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Item 4
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Item 5
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Item 6
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Item 7
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Item 7A
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Item 8
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Item 9
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Item 9A
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Item 9B
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Item 10
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Item 11
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Item 12
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Item 13
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Item 14
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Item 15
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(1)
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As of September 30, 2017
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(2)
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As of June 30, 2017
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(3)
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Transacted on our payment products for the 12 months ended June 30, 2017
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•
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Protecting payment data with a payments architecture that complies with industry standards;
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•
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Rendering the use of sensitive payment data useless by deploying technologies such as the EMV chip and tokenization;
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•
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Using predictive analytics, intelligence, and insights to identify and prevent fraud before it happens; and
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•
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Empowering consumers to actively protect their own financial information and transactions.
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(1)
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Figures and period-over-period percentages reflect the inclusion of Visa Europe for the full year of fiscal 2017. We acquired Visa Europe on June 21, 2016.
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(2)
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Please see
Item 7—Management's Discussion and Analysis of Financial Condition and Results of Operations
for a reconciliation of our adjusted financial results.
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(3)
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For the 12 months ended June 30, 2017, upon which fiscal 2017 service revenues are based.
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(1)
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UnionPay, which operates primarily within the Chinese domestic market, is not included in this table as Visa currently does not compete in that market under local law. Although we are uncertain how UnionPay reports certain volumes, reportedly its numbers could approach or exceed some of those listed in this chart.
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(2)
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The data presented are provided by our financial institution clients, inclusive of Europe for the second half of calendar year 2016. Previously submitted information may be updated and all data are subject to review by Visa.
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(3)
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MasterCard, American Express, JCB and Discover/Diners Club data sourced from The Nilson Report issue 1109 (May 2017). Includes all consumer and commercial credit, debit and prepaid cards. Some figures are estimates and currency figures are in U.S. dollars. MasterCard excludes Maestro and Cirrus figures. American Express includes figures for third-party issuers. Discover figures consist of U.S. data only and include third-party issuers. JCB figures include third-party issuers and other payment-related products.
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•
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competitors, clients and others are developing alternate payment networks or products that could disintermediate us from the transaction processing or the value-added services we provide to support such processing. Examples include initiatives from The Clearing House, an association comprised of large financial institutions that is developing its own faster payments system, and Early Warning Services, which operates Zelle, a bank-offered alternative network that provides another platform for faster funds or real-time payments across a variety of payment types, including P2P, corporate and government disbursement, bill pay and deposit check transactions;
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similarly, multiple countries are developing or promoting real-time payment systems or mandating local networks with clients that also present a risk of disintermediation to our business;
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competition may increase from alternate types of payment services, such as mobile payment services, ecommerce payment services, P2P payment services, faster payment initiatives and payment services that permit ACH or direct debits from consumer checking accounts;
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•
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parties that process our transactions may try to minimize or eliminate our position in the payments value chain;
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•
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parties that access our payment credentials, tokens and technologies, including clients, technology solution providers or others might be able to migrate account holders and other clients to alternate payment methods or use our payment credentials, tokens and technologies to establish or help bolster alternate payment methods and platforms;
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•
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we may need to adjust our local rules and practices to remain competitive amidst evolving regulatory landscapes and competitors’ practices;
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we may be asked to develop or customize certain aspects of our payment services for use by consumers, processors or other third parties, thereby increasing operational costs;
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•
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we may need to agree to business arrangements that may be less protective of Visa’s proprietary technology and interests in order to compete and we may face increasing risk of litigation concerning intellectual property, as more technology companies compete with our offerings;
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participants in the payments industry may merge, form joint ventures or enable or enter into other business combinations that strengthen their existing business propositions or create new, competing payment services;
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as this landscape is quickly evolving, we may not be able to foresee or respond sufficiently to emerging risks associated with new business, products, services and practices; or
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•
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new or revised industry standards related to EMV chip payment technology, cloud-based payments, tokenization or other technologies set by organizations such as the International Organization for Standardization, American National Standards Institute and EMVCo may result in additional costs and expenses for Visa and its clients, or otherwise negatively impact the functionality and competitiveness of our products and services.
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•
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disruption to our ongoing business, including diversion of resources and management’s attention from our existing business;
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•
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greater than expected investment of resources or operating expenses;
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failure to develop the acquired business adequately;
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•
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difficulty implementing controls, procedures, and policies at the acquired company;
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challenges of integrating new employees, business cultures, business systems, and technologies;
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failure to retain employees, clients, or partners of the acquired business;
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•
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in the case of foreign acquisitions, risks related to the integration of operations across different cultures and languages, and the economic, political, and regulatory risks associated with operating in new regions or countries. For more information on regulatory risks, please see
Item 1—Business—Government Regulations
and Item
1A—Risk Factors—Regulatory Risks
above;
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•
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discovery of unidentified issues after the acquisition or investment was made;
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failure to mitigate the liabilities of the acquired business;
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dilutive issuance of equity securities, if new securities are issued;
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•
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the incurrence of debt;
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negative impact on our financial position and/or statement of operations; and
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anticipated benefits, synergies, or value of the investment or acquisition not materializing.
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no person may beneficially own more than 15% of our class A common stock (or 15% of our total outstanding common stock on an as-converted basis), unless our board of directors approves the acquisition of such shares in advance;
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no competitor or an affiliate of a competitor may hold more than 5% of our total outstanding common stock on an as-converted basis;
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the affirmative votes of the class B and C common stock and series B and series C preferred stock are required for certain types of consolidations or mergers;
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our stockholders may only take action during a stockholders’ meeting and may not act by written consent; and
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only the board of directors, Chairman, or CEO may call a special meeting of stockholders.
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ITEM 1B.
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Unresolved Staff Comments
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ITEM 2.
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Properties
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ITEM 3.
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Legal Proceedings
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ITEM 4.
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Mine Safety Disclosures
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ITEM 5.
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Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Fiscal 2017
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High
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Low
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First Quarter
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$
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83.96
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$
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75.17
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Second Quarter
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$
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92.05
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$
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78.49
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Third Quarter
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$
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96.60
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$
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88.13
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Fourth Quarter
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$
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106.84
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$
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93.19
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Fiscal 2016
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High
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Low
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First Quarter
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$
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81.01
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$
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68.36
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Second Quarter
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$
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77.00
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$
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66.12
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Third Quarter
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$
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81.73
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$
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73.25
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Fourth Quarter
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$
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83.79
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$
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73.83
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Fiscal 2017
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Dividend
Per Share
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First Quarter
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$
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0.165
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Second Quarter
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$
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0.165
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Third Quarter
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$
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0.165
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Fourth Quarter
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$
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0.165
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Fiscal 2016
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Dividend
Per Share
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First Quarter
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$
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0.14
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Second Quarter
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$
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0.14
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Third Quarter
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$
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0.14
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Fourth Quarter
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$
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0.14
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Period
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Total Number Of
Shares Purchased
(1)
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Average Price Paid
Per Share
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Total Number Of
Shares Purchased
As Part Of Publicly
Announced Plans Or
Programs
(2),
(3)
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Approximate
Dollar Value
Of Shares That
May Yet Be
Purchased Under The Plans Or
Programs
(2),(3)
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July 1-31, 2017
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2,311,218
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$
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95.02
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2,294,983
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$
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5,310,521,927
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August 1-31, 2017
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5,594,044
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$
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102.11
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5,594,044
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$
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4,739,175,366
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September 1-30, 2017
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9,019,355
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$
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104.72
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9,019,355
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$
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3,794,467,851
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Total
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16,924,617
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$
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102.54
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16,908,382
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(1)
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Includes
16,235
shares of class A common stock withheld at an average price of
$99.15
per share (per the terms of grants under the Visa 2007 Equity Incentive Compensation Plan) to offset tax withholding obligations that occur upon vesting and release of restricted shares.
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(2)
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The figures in the table reflect transactions according to the trade dates. For purposes of our consolidated financial statements included in this Form 10-K, the impact of these repurchases is recorded according to the settlement dates.
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(3)
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Our board of directors from time to time authorizes the repurchase of shares of our common stock up to a certain monetary limit. In April 2017, our board of directors authorized a share repurchase program for $5.0 billion. This authorization has no expiration date. All share repurchase programs authorized prior to April 2017 have been completed.
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Plan Category
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(a)
Number Of Shares
Of Class A Common Stock Issuable Upon Exercise Of
Outstanding Options And Rights
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Weighted-Average Exercise Price Of
Outstanding Options
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Number Of Shares Of
Class A
Common Stock
Remaining Available For
Future Issuance Under
Equity Compensation
Plans (Excluding Shares
Reflected In Column (a))
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Equity compensation plans approved by stockholders
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13,081,232
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(1)
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$
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50.17
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(2)
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166,492,598
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(3)
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(1)
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The maximum number of shares issuable as of
September 30, 2017
consisted of
7,115,876
outstanding options,
4,673,701
outstanding restricted stock units and
937,675
outstanding performance shares under the EIP and 353,980 purchase rights outstanding under the ESPP.
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(2)
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The weighted-average exercise price is calculated based solely on the exercise prices of the outstanding stock options and does not reflect the shares that will be issued upon the vesting of outstanding restricted stock units and performance shares, which have no exercise price. Additionally, it excludes the weighted-average exercise price of the outstanding purchase rights under the ESPP, as the exercise price is based on the future stock price, net of discount, at the end of each monthly purchase over the offering period.
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(3)
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In January 2015, our class A stockholders approved the ESPP which permits eligible employees to purchase shares of Class A common stock at a 15% discount to the stock price on the purchase date, subject to certain restrictions. See
Note 15—Share-based Compensation
to our consolidated financial statements included in
Item 8—Financial Statements and Supplementary Data
of this report. As of
September 30, 2017
,
149 million
shares and
18 million
shares remain available for issuance under the EIP and the ESPP, respectively.
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ITEM 6.
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Selected Financial Data
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Fiscal Year Ended September 30,
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Statement of Operations Data
:
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2017
(1)
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2016
(1)
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2015
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2014
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2013
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(in millions, except per share data)
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Operating revenues
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$
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18,358
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$
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15,082
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$
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13,880
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$
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12,702
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$
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11,778
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Operating expenses
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$
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6,214
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$
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7,199
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(3)
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$
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4,816
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$
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5,005
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$
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4,539
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Operating income
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$
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12,144
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$
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7,883
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$
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9,064
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$
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7,697
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$
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7,239
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Net income
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$
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6,699
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(2)
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$
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5,991
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$
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6,328
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$
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5,438
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$
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4,980
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Basic earnings per share—class A common stock
(4)
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$
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2.80
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$
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2.49
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$
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2.58
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$
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2.16
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$
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1.90
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Diluted earnings per share—class A common stock
(4)
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$
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2.80
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$
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2.48
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$
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2.58
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$
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2.16
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$
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1.90
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At September 30,
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Balance Sheet Data
:
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2017
(1)
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2016
(1)
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2015
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2014
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2013
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(in millions, except per share data)
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||||||||||||||||||
Total assets
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$
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67,977
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$
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64,035
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$
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39,367
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$
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37,543
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$
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35,495
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Accrued litigation
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$
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982
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$
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981
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$
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1,024
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$
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1,456
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(5)
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$
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5
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(5)
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Long-term debt
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$
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16,618
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(6)
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$
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15,882
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(6)
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$
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—
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$
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—
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$
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—
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Total equity
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$
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32,760
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$
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32,912
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$
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29,842
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$
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27,413
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$
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26,870
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Dividend declared and paid per common share
(4)
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$
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0.66
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$
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0.56
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$
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0.48
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$
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0.40
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$
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0.33
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(1)
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Our results of operations for fiscal 2017 and the last quarter of fiscal 2016, and the financial position as of September 30, 2017 and 2016, include Visa Europe's financial results.
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(2)
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During 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.
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(3)
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During 2016, upon consummation of the Visa Europe acquisition, 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.
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(4)
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The per share amounts for the prior periods presented have been retroactively adjusted to reflect the four-for-one stock split effected in the second quarter of fiscal 2015.
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(5)
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During fiscal 2013, we made payments from the U.S. litigation escrow account totaling $4.4 billion in connection with the U.S. covered litigation. During fiscal 2014, the court entered the final judgment order approving the settlement with the class plaintiffs in the interchange multidistrict litigation proceedings. Certain merchants in the settlement classes objected to the settlement and filed opt-out claims. Takedown payments of approximately $1.1 billion related to the opt-out merchants were received and deposited into the U.S. litigation escrow account, and a related increase in accrued litigation to address the opt-out claims were recorded in the second quarter of fiscal 2014. See
Note 3—U.S. and Europe Retrospective Responsibility Plans
and
Note 19—Legal Matters
to our consolidated financial statements included in
Item 8—Financial Statements and Supplementary Data
of this report.
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(6)
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During fiscal 2017 and fiscal 2016, we issued fixed-rate senior notes in an aggregate principal amount of
$2.5 billion
and
$16.0 billion
, respectively. See
Note 8—Debt
to our consolidated financial statements included in
Item 8—Financial Statements and Supplementary Data
of this report.
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ITEM 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Fiscal Year Ended
September 30,
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% Change
(1)
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||||||||||||||
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2017
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2016
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2015
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2017
vs.
2016
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2016
vs.
2015
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||||||||
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(in millions, except percentages)
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||||||||||||||||
Net income, as reported
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$
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6,699
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$
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5,991
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$
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6,328
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12
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%
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(5
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)%
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Diluted earnings per share, as reported
(2)
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$
|
2.80
|
|
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$
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2.48
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|
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$
|
2.58
|
|
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13
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%
|
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(4
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)%
|
|
|
|
|
|
|
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|
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||||||||
Net income, as adjusted
(3)
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$
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8,335
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|
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$
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6,862
|
|
|
$
|
6,438
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|
|
21
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%
|
|
7
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%
|
Diluted earnings per share, as adjusted
(2),(3)
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$
|
3.48
|
|
|
$
|
2.84
|
|
|
$
|
2.62
|
|
|
22
|
%
|
|
8
|
%
|
(1)
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Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.
|
(2)
|
The per share amounts for the prior periods presented have been retroactively adjusted to reflect the four-for-one stock split effected in the second quarter of fiscal 2015.
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(3)
|
Adjusted net income and adjusted diluted earnings per share in fiscal
2017
,
2016
and
2015
exclude the impact of certain significant items that we believe are not indicative of our operating performance, as they were either non-recurring or had no cash impact. For a full reconciliation of our adjusted financial results, see tables in
Adjusted financial results
below.
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•
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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.
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•
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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.
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•
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Severance cost.
In the fourth quarter of fiscal 2016, 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.
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•
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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.
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•
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Acquisition-related costs.
During fiscal 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 UK 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.
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•
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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.
|
•
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Net gains on currency forward contracts.
During 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 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.
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•
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Foreign exchange gain on euro deposits.
During fiscal 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 of the Visa Europe acquisition. 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.
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•
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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 our reported income tax provision.
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|
Fiscal 2017
|
|||||||||||||||||||||
(in millions, except percentages and per share data)
|
Operating Expenses
|
|
Operating Margin
(1),(2)
|
|
Non-operating (Expense)
Income |
|
Income Taxes
|
|
Net Income
|
|
Diluted Earnings Per Share
(2)
|
|||||||||||
As reported
|
$
|
6,214
|
|
|
66
|
%
|
|
$
|
(450
|
)
|
|
$
|
4,995
|
|
|
$
|
6,699
|
|
|
$
|
2.80
|
|
Elimination of deferred tax balances
|
—
|
|
|
—
|
%
|
|
—
|
|
|
(1,515
|
)
|
|
1,515
|
|
|
0.63
|
|
|||||
Charitable contribution
|
(192
|
)
|
|
1
|
%
|
|
—
|
|
|
71
|
|
|
121
|
|
|
0.05
|
|
|||||
As adjusted
|
$
|
6,022
|
|
|
67
|
%
|
|
$
|
(450
|
)
|
|
$
|
3,551
|
|
|
$
|
8,335
|
|
|
$
|
3.48
|
|
|
Fiscal 2016
|
|||||||||||||||||||||
(in millions, except percentages and per share data)
|
Operating Expenses
|
|
Operating Margin
(1),(2)
|
|
Non-operating (Expense)
Income |
|
Income Taxes
|
|
Net Income
|
|
Diluted Earnings Per Share
(2)
|
|||||||||||
As reported
|
$
|
7,199
|
|
|
52
|
%
|
|
$
|
129
|
|
|
$
|
2,021
|
|
|
$
|
5,991
|
|
|
$
|
2.48
|
|
Severance cost
|
(110
|
)
|
|
1
|
%
|
|
—
|
|
|
38
|
|
|
72
|
|
|
0.03
|
|
|||||
Remeasurement of deferred tax liability
|
—
|
|
|
—
|
%
|
|
—
|
|
|
88
|
|
|
(88
|
)
|
|
(0.04
|
)
|
|||||
Acquisition-related costs
|
(152
|
)
|
|
1
|
%
|
|
—
|
|
|
56
|
|
|
96
|
|
|
0.04
|
|
|||||
Visa Europe Framework Agreement loss
|
(1,877
|
)
|
|
12
|
%
|
|
—
|
|
|
693
|
|
|
1,184
|
|
|
0.49
|
|
|||||
Net gains on currency forward contracts
|
—
|
|
|
—
|
%
|
|
(74
|
)
|
|
(27
|
)
|
|
(47
|
)
|
|
(0.02
|
)
|
|||||
Foreign exchange gain on euro deposits
|
—
|
|
|
—
|
%
|
|
(145
|
)
|
|
(54
|
)
|
|
(91
|
)
|
|
(0.04
|
)
|
|||||
Revaluation of Visa Europe put option
|
—
|
|
|
—
|
%
|
|
(255
|
)
|
|
—
|
|
|
(255
|
)
|
|
(0.11
|
)
|
|||||
As adjusted
|
$
|
5,060
|
|
|
66
|
%
|
|
$
|
(345
|
)
|
|
$
|
2,815
|
|
|
$
|
6,862
|
|
|
$
|
2.84
|
|
|
Fiscal 2015
|
|||||||||||||||||||||
(in millions, except percentages and per share data)
|
Operating Expenses
|
|
Operating Margin
(1),(2)
|
|
Non-operating (Expense)
Income |
|
Income Taxes
|
|
Net Income
|
|
Diluted Earnings Per Share
(2),(3)
|
|||||||||||
As reported
|
$
|
4,816
|
|
|
65
|
%
|
|
$
|
(69
|
)
|
|
$
|
2,667
|
|
|
$
|
6,328
|
|
|
$
|
2.58
|
|
Revaluation of Visa Europe put option
|
—
|
|
|
—
|
%
|
|
110
|
|
|
—
|
|
|
110
|
|
|
0.04
|
|
|||||
As adjusted
|
$
|
4,816
|
|
|
65
|
%
|
|
$
|
41
|
|
|
$
|
2,667
|
|
|
$
|
6,438
|
|
|
$
|
2.62
|
|
(1)
|
Operating margin is calculated as operating income divided by net operating revenues.
|
(2)
|
Figures in the table may not recalculate exactly due to rounding. Operating margin, diluted earnings per share and their respective totals are calculated based on unrounded numbers.
|
(3)
|
The per share amounts for the prior periods presented have been retroactively adjusted to reflect the four-for-one stock split effected in the second quarter of fiscal 2015.
|
|
United States
|
|
International
|
|
Visa Inc.
|
|||||||||||||||||||||||||||
|
12 months
ended June 30,
(1)
|
|
12 months
ended June 30,
(1)
|
|
12 months
ended June 30,
(1)
|
|||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
%
Change |
|
2017
|
|
2016
|
|
%
Change |
|
2017
|
|
2016
|
|
%
Change |
|||||||||||||||
|
(in billions, except percentages)
|
|||||||||||||||||||||||||||||||
Nominal payments volume
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Consumer credit
|
$
|
1,309
|
|
|
$
|
1,079
|
|
|
21
|
%
|
|
$
|
2,224
|
|
|
$
|
1,720
|
|
|
29
|
%
|
|
$
|
3,533
|
|
|
$
|
2,799
|
|
|
26
|
%
|
Consumer debit
(3)
|
1,372
|
|
|
1,320
|
|
|
4
|
%
|
|
1,545
|
|
|
454
|
|
|
241
|
%
|
|
2,917
|
|
|
1,774
|
|
|
64
|
%
|
||||||
Commercial
(4)
|
506
|
|
|
450
|
|
|
12
|
%
|
|
309
|
|
|
147
|
|
|
110
|
%
|
|
815
|
|
|
598
|
|
|
36
|
%
|
||||||
Total nominal payments volume
(5)
|
$
|
3,187
|
|
|
$
|
2,849
|
|
|
12
|
%
|
|
$
|
4,078
|
|
|
$
|
2,321
|
|
|
76
|
%
|
|
$
|
7,265
|
|
|
$
|
5,170
|
|
|
41
|
%
|
Cash volume
|
543
|
|
|
520
|
|
|
5
|
%
|
|
2,357
|
|
|
1,775
|
|
|
33
|
%
|
|
2,900
|
|
|
2,294
|
|
|
26
|
%
|
||||||
Total nominal volume
(5),(6)
|
$
|
3,730
|
|
|
$
|
3,369
|
|
|
11
|
%
|
|
$
|
6,435
|
|
|
$
|
4,095
|
|
|
57
|
%
|
|
$
|
10,165
|
|
|
$
|
7,464
|
|
|
36
|
%
|
|
United States
|
|
International
|
|
Visa Inc.
|
|||||||||||||||||||||||||||
|
12 months
ended June 30,
(1)
|
|
12 months
ended June 30,
(1)
|
|
12 months
ended June 30,
(1)
|
|||||||||||||||||||||||||||
|
2016
|
|
2015
|
|
%
Change |
|
2016
|
|
2015
|
|
%
Change |
|
2016
|
|
2015
|
|
%
Change |
|||||||||||||||
|
(in billions, except percentages)
|
|||||||||||||||||||||||||||||||
Nominal payments volume
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Consumer credit
|
$
|
1,079
|
|
|
$
|
980
|
|
|
10
|
%
|
|
$
|
1,720
|
|
|
$
|
1,676
|
|
|
3
|
%
|
|
$
|
2,799
|
|
|
$
|
2,656
|
|
|
5
|
%
|
Consumer debit
(3)
|
1,320
|
|
|
1,201
|
|
|
10
|
%
|
|
454
|
|
|
462
|
|
|
(2
|
)%
|
|
1,774
|
|
|
1,663
|
|
|
7
|
%
|
||||||
Commercial
(4)
|
450
|
|
|
412
|
|
|
9
|
%
|
|
147
|
|
|
150
|
|
|
(2
|
)%
|
|
598
|
|
|
562
|
|
|
6
|
%
|
||||||
Total nominal payments volume
(5)
|
$
|
2,849
|
|
|
$
|
2,594
|
|
|
10
|
%
|
|
$
|
2,321
|
|
|
$
|
2,288
|
|
|
1
|
%
|
|
$
|
5,170
|
|
|
$
|
4,882
|
|
|
6
|
%
|
Cash volume
|
520
|
|
|
491
|
|
|
6
|
%
|
|
1,775
|
|
|
2,015
|
|
|
(12
|
)%
|
|
2,294
|
|
|
2,506
|
|
|
(8
|
)%
|
||||||
Total nominal volume
(5),(6)
|
$
|
3,369
|
|
|
$
|
3,085
|
|
|
9
|
%
|
|
$
|
4,095
|
|
|
$
|
4,303
|
|
|
(5
|
)%
|
|
$
|
7,464
|
|
|
$
|
7,388
|
|
|
1
|
%
|
|
International
|
|
Visa Inc.
|
||||||||||||||||||||
|
12 months ended
June 30, 2017 vs 2016 (1) |
|
12 months ended
June 30, 2016 vs 2015 (1) |
|
12 months ended
June 30, 2017 vs 2016 (1) |
|
12 months ended
June 30, 2016 vs 2015 (1) |
||||||||||||||||
|
Nominal
|
|
Constant
(7)
|
|
Nominal
|
|
Constant
(7)
|
|
Nominal
|
|
Constant
(7)
|
|
Nominal
|
|
Constant
(7)
|
||||||||
Payments volume growth
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Consumer credit
|
29
|
%
|
|
30
|
%
|
|
3
|
%
|
|
13
|
%
|
|
26
|
%
|
|
27
|
%
|
|
5
|
%
|
|
12
|
%
|
Consumer debit
(3)
|
241
|
%
|
|
238
|
%
|
|
(2
|
)%
|
|
15
|
%
|
|
64
|
%
|
|
64
|
%
|
|
7
|
%
|
|
11
|
%
|
Commercial
(4)
|
110
|
%
|
|
105
|
%
|
|
(2
|
)%
|
|
12
|
%
|
|
36
|
%
|
|
36
|
%
|
|
6
|
%
|
|
10
|
%
|
Total payments volume growth
(5)
|
76
|
%
|
|
76
|
%
|
|
1
|
%
|
|
13
|
%
|
|
41
|
%
|
|
41
|
%
|
|
6
|
%
|
|
11
|
%
|
Cash volume growth
|
33
|
%
|
|
33
|
%
|
|
(12
|
)%
|
|
4
|
%
|
|
26
|
%
|
|
26
|
%
|
|
(8
|
)%
|
|
4
|
%
|
Total volume growth
(5)
|
57
|
%
|
|
57
|
%
|
|
(5
|
)%
|
|
9
|
%
|
|
36
|
%
|
|
36
|
%
|
|
1
|
%
|
|
9
|
%
|
(1)
|
Service revenues in a given quarter are assessed based on nominal payments volume in the prior quarter. Therefore, service revenues reported for the 12 months ended
September 30, 2017
,
2016
and
2015
, were based on nominal payments volume reported by our financial institution clients for the 12 months ended June 30,
2017
,
2016
and
2015
, respectively.
|
(2)
|
Figures in the tables may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.
|
(3)
|
Includes consumer prepaid volume and interlink volume.
|
(4)
|
Includes large, middle and small business credit and debit, as well as commercial prepaid volume.
|
(5)
|
Our nominal payments volume, total payments volume growth and total volume growth for the 12 months ended June 30, 2016 does not reflect the related nominal payments volume of $477 billion and cash volume of $177 billion for Visa Europe for the three months ended June 30, 2016, which impacts our service revenues for the fourth quarter of fiscal 2016.
|
(6)
|
Total nominal volume is the sum of total nominal payments volume and cash volume. Total nominal payments volume is the total monetary value of transactions for goods and services that are purchased on cards carrying the Visa, Visa Electron, Interlink and V PAY brands. Cash volume generally consists of cash access transactions, balance access transactions, balance transfers and convenience checks. Total nominal volume is provided by our financial institution clients, subject to review by Visa. On occasion, previously presented volume information may be updated. Prior period updates are not material.
|
(7)
|
Growth on a constant-dollar basis excludes the impact of foreign currency fluctuations against the U.S. dollar.
|
|
2017
|
|
2016
(3)
|
|
2015
(3)
|
|
2017 vs. 2016
% Change
|
|
2016 vs. 2015
% Change
(3)
|
|||||
|
(in millions, except percentages)
|
|||||||||||||
Visa processed transactions
|
111,215
|
|
|
83,159
|
|
|
70,968
|
|
|
34
|
%
|
|
17
|
%
|
(1)
|
Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers. On occasion, previously presented information may be updated. Prior period updates are not material. Our operating revenues and related processed transactions for fiscal 2016 do not reflect the financial results or related processed transactions of Visa Europe from the acquisition date, June 21, 2016, through June 30, 2016 as the impact was immaterial. See
Note 2—Visa Europe
to our consolidated financial statements included in
Item 8—Financial Statements and Supplementary Data
of this report.
|
(2)
|
Visa processed transactions in fiscal 2017 and fourth quarter of fiscal 2016 include transactions processed by Visa Europe.
|
(3)
|
As a result of changes in Russian National Payment System law, we transitioned the processing of Russian domestic transactions to the Russian NSPK during the third quarter of fiscal 2015. The number of transactions processed by the Visa network does not reflect Russian domestic transactions processed after this transition.
|
|
Fiscal Year Ended
September 30,
|
|
$ Change
|
|
% Change
(1)
|
||||||||||||||||||||
|
2017
|
|
2016
(2)
|
|
2015
|
|
2017
vs. 2016 |
|
2016
vs. 2015 |
|
2017
vs. 2016 |
|
2016
vs. 2015 |
||||||||||||
|
(in millions, except percentages)
|
||||||||||||||||||||||||
United States
|
$
|
8,704
|
|
|
$
|
7,851
|
|
|
$
|
7,406
|
|
|
$
|
853
|
|
|
$
|
445
|
|
|
11
|
%
|
|
6
|
%
|
International
|
9,654
|
|
|
7,040
|
|
|
6,219
|
|
|
2,614
|
|
|
821
|
|
|
37
|
%
|
|
13
|
%
|
|||||
Revenues earned under the Framework Agreement
(3)
|
—
|
|
|
191
|
|
|
255
|
|
|
(191
|
)
|
|
(64
|
)
|
|
(100
|
)%
|
|
(25
|
)%
|
|||||
Net operating revenues
|
$
|
18,358
|
|
|
$
|
15,082
|
|
|
$
|
13,880
|
|
|
$
|
3,276
|
|
|
$
|
1,202
|
|
|
22
|
%
|
|
9
|
%
|
(1)
|
Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.
|
(2)
|
Our operating revenues for fiscal 2016 do not reflect revenues earned by Visa Europe from the acquisition date, June 21, 2016, through June 30, 2016 as the impact was immaterial.
|
(3)
|
Reflects revenues earned from Visa Europe prior to the acquisition, in accordance with the Framework Agreement that provided for trademark and technology licenses and bilateral services. The Framework Agreement was effectively settled upon the closing of the acquisition.
|
|
Fiscal Year Ended
September 30,
|
|
$ Change
|
|
% Change
(1)
|
||||||||||||||||||||
|
2017
|
|
2016
(2)
|
|
2015
|
|
2017
vs. 2016 |
|
2016
vs. 2015 |
|
2017
vs. 2016 |
|
2016
vs. 2015 |
||||||||||||
|
(in millions, except percentages)
|
||||||||||||||||||||||||
Service revenues
|
$
|
7,975
|
|
|
$
|
6,747
|
|
|
$
|
6,302
|
|
|
$
|
1,228
|
|
|
$
|
445
|
|
|
18
|
%
|
|
7
|
%
|
Data processing revenues
|
7,786
|
|
|
6,272
|
|
|
5,552
|
|
|
1,514
|
|
|
720
|
|
|
24
|
%
|
|
13
|
%
|
|||||
International transaction revenues
|
6,321
|
|
|
4,649
|
|
|
4,064
|
|
|
1,672
|
|
|
585
|
|
|
36
|
%
|
|
14
|
%
|
|||||
Other revenues
|
841
|
|
|
823
|
|
|
823
|
|
|
18
|
|
|
—
|
|
|
2
|
%
|
|
—
|
%
|
|||||
Client incentives
|
(4,565
|
)
|
|
(3,409
|
)
|
|
(2,861
|
)
|
|
(1,156
|
)
|
|
(548
|
)
|
|
34
|
%
|
|
19
|
%
|
|||||
Net operating revenues
|
$
|
18,358
|
|
|
$
|
15,082
|
|
|
$
|
13,880
|
|
|
$
|
3,276
|
|
|
$
|
1,202
|
|
|
22
|
%
|
|
9
|
%
|
(1)
|
Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.
|
(2)
|
Our operating revenues for fiscal 2016 do not reflect revenues earned by Visa Europe from the acquisition date, June 21, 2016, through June 30, 2016 as the impact was immaterial.
|
•
|
Service revenues
increased in
fiscal 2017
and
2016
primarily due to
41%
and
6%
growth in nominal payments volume, respectively. The growth in service revenues was slower than the growth in payments volume during
fiscal 2017
, reflecting the inclusion of Visa Europe revenue and the resulting impact on our service revenue yield. Fiscal 2017 and 2016 growth also reflected select pricing modifications.
|
•
|
Data processing revenues
increased in
fiscal 2017
and
2016
due to overall growth in processed transactions of
34%
and
17%
, respectively. The growth in data processing revenues was slower than the growth in processed transactions, reflecting the inclusion of data processing revenues earned by Visa Europe and the resulting impact on our data processing revenue yield.
|
•
|
International transaction revenues
increased in
fiscal 2017
and
2016
primarily due to nominal cross-border volume growth of 79% and 37%, respectively, which includes revenues earned by Visa Europe and the resulting impact on our corresponding yield. International transaction revenue growth in fiscal 2017 and 2016 also reflected select pricing modifications, which was partially offset in fiscal 2017 by lower volatility in a broad range of currencies.
|
•
|
Client incentives
increased in
fiscal 2017
and
2016
, reflecting overall growth in global payments volume, incentives incurred on long-term client contracts that were initiated or renewed during fiscal 2017 and 2016 and the inclusion of Visa Europe's incentives for fiscal 2017 and the fourth quarter of fiscal 2016. The amount of client incentives we record in future periods will vary based on changes in performance expectations, actual client performance, amendments to existing contracts or the execution of new contracts.
|
|
Fiscal Year Ended
September 30,
|
|
$ Change
|
|
% Change
(1)
|
||||||||||||||||||||
|
2017
|
|
2016
(2)
|
|
2015
|
|
2017
vs. 2016 |
|
2016
vs. 2015 |
|
2017
vs. 2016 |
|
2016
vs. 2015 |
||||||||||||
|
(in millions, except percentages)
|
||||||||||||||||||||||||
Personnel
|
$
|
2,628
|
|
|
$
|
2,226
|
|
|
$
|
2,079
|
|
|
$
|
402
|
|
|
$
|
147
|
|
|
18
|
%
|
|
7
|
%
|
Marketing
|
922
|
|
|
869
|
|
|
872
|
|
|
53
|
|
|
(3
|
)
|
|
6
|
%
|
|
—
|
%
|
|||||
Network and processing
|
620
|
|
|
538
|
|
|
474
|
|
|
82
|
|
|
64
|
|
|
15
|
%
|
|
13
|
%
|
|||||
Professional fees
|
409
|
|
|
389
|
|
|
336
|
|
|
20
|
|
|
53
|
|
|
5
|
%
|
|
16
|
%
|
|||||
Depreciation and amortization
|
556
|
|
|
502
|
|
|
494
|
|
|
54
|
|
|
8
|
|
|
11
|
%
|
|
2
|
%
|
|||||
General and administrative
|
1,060
|
|
|
796
|
|
|
547
|
|
|
264
|
|
|
249
|
|
|
33
|
%
|
|
46
|
%
|
|||||
Litigation provision
|
19
|
|
|
2
|
|
|
14
|
|
|
17
|
|
|
(12
|
)
|
|
NM
|
|
|
(86
|
)%
|
|||||
Visa Europe Framework Agreement loss
|
—
|
|
|
1,877
|
|
|
—
|
|
|
(1,877
|
)
|
|
1,877
|
|
|
(100
|
)%
|
|
NM
|
|
|||||
Total operating expenses
(3)
|
$
|
6,214
|
|
|
$
|
7,199
|
|
|
$
|
4,816
|
|
|
$
|
(985
|
)
|
|
$
|
2,383
|
|
|
(14
|
)%
|
|
49
|
%
|
(1)
|
Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.
|
(2)
|
Our operating expenses for fiscal 2016 do not reflect the expenses incurred by Visa Europe from the acquisition date, June 21, 2016, through June 30, 2016 as the impact was immaterial.
|
(3)
|
Operating expenses for fiscal 2017 and 2016 include significant items that we do not believe are indicative of our operating performance as they are related to the charitable donation or the Visa Europe acquisition. See
Overview
within this
Item 7—Management's Discussion and Analysis of Financial Condition and Results of Operations
.
|
•
|
Personnel expenses
increased in fiscal
2017
driven by higher incentive compensation, combined with continued increase in headcount reflecting our strategy to invest for future growth. The increase in fiscal 2016 was primarily due to a severance charge related to personnel reductions including planned reductions at Visa Europe. This increase was partially offset by a decrease in contractor costs, an increase in personnel costs that were invested in and capitalized as part of technology development projects and lower incentive compensation.
|
•
|
Network and processing
expenses
increased in fiscal 2017 and 2016 due to fees associated with the processing of Russian domestic transactions that transitioned to the Russian NSPK during the third quarter of fiscal 2015.
|
•
|
Professional fees
increased in fiscal 2016 primarily due to transaction costs incurred in connection with our acquisition of Visa Europe in 2016.
|
•
|
Depreciation and amortization expenses
increased in fiscal
2017
primarily due to additional depreciation from our ongoing investments in technology assets and infrastructure to support our digital solutions and core business initiatives.
|
•
|
General and administrative expenses
increased in fiscal
2017
primarily due to $192 million of expense related to the Visa Inc. shares held by Visa Europe that were received by the newly-formed Visa Foundation, as well as an increase in expense to provide product benefits to our account holders as a result of business growth. The increase in 2016 was mainly due to costs incurred related to our acquisition of Visa Europe in 2016 as well as net foreign exchange losses incurred as a result of changes in the U.S. dollar exchange rate against other currencies in which we transact.
|
|
Fiscal Year Ended
September 30,
|
|
$ Change
|
|
% Change
(1)
|
|||||||||||||||||||
|
2017
|
|
2016
(2)
|
|
2015
|
|
2017
vs. 2016 |
|
2016
vs. 2015 |
|
2017
vs. 2016 |
|
2016
vs. 2015 |
|||||||||||
|
(in millions, except percentages)
|
|||||||||||||||||||||||
Interest expense
|
$
|
(563
|
)
|
|
$
|
(427
|
)
|
|
$
|
(3
|
)
|
|
$
|
(136
|
)
|
|
$
|
(424
|
)
|
|
32
|
%
|
|
NM
|
Other
|
113
|
|
|
556
|
|
|
(66
|
)
|
|
(443
|
)
|
|
622
|
|
|
(80
|
)%
|
|
NM
|
|||||
Total non-operating (expense) income
|
$
|
(450
|
)
|
|
$
|
129
|
|
|
$
|
(69
|
)
|
|
$
|
(579
|
)
|
|
$
|
198
|
|
|
NM
|
|
|
NM
|
(1)
|
Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.
|
(2)
|
Fiscal 2016
non-operating (expense) income
includes financial results of Visa Europe for the fourth quarter of fiscal 2016, but does not reflect the financial results of Visa Europe from the acquisition date, June 21, 2016, through June 30, 2016 as the impact was immaterial.
|
•
|
Interest expense
increased during fiscal 2017 and 2016 primarily due to the issuance of fixed-rate senior notes in each respective period. See
Note 8—Debt
to our consolidated financial statements included in
Item 8—Financial Statements and Supplementary Data
of this report.
|
•
|
Other
non-operating (expense) income
in fiscal 2016 and 2015 was primarily comprised of the following:
|
▪
|
net gains of $74 million in fiscal 2016 related to currency forward contracts entered into to mitigate a portion of our foreign currency exchange rate risk associated with the upfront cash consideration paid in the Visa Europe acquisition;
|
▪
|
a foreign exchange gain of $145 million in fiscal 2016 on euro deposits as a result of holding euro-denominated bank balances for a short period in advance of the closing of the Visa Europe acquisition;
|
▪
|
a non-cash adjustment of $255 million in the first quarter of fiscal 2016 to decrease the fair value of the Visa Europe put option, which is not subject to tax, reducing the fair value of the liability to zero; and
|
▪
|
a non-cash adjustment of $110 million in the third quarter of fiscal 2015 to increase the fair value of the unamended Visa Europe put option, which is not subject to tax.
|
•
|
the aforementioned $1.5 billion non-recurring, non-cash income tax provision related to the legal entity reorganization recorded in fiscal 2017;
|
•
|
$71 million tax benefit related to Visa Foundation's receipt of Visa Inc. shares mentioned above, recorded in fiscal 2017;
|
•
|
$70 million of excess tax benefits related to share-based payments recorded in fiscal 2017, as a result of the early adoption of Accounting Standards Update 2016-09. See
Note 1—Summary of Significant Accounting Policies
to our consolidated financial statements included in
Item 8—Financial Statements and Supplementary Data
of this report; and
|
•
|
the absence of:
|
▪
|
the effect of one-time items related to the Visa Europe acquisition recorded during fiscal 2016, the most significant of which was the $1.9 billion U.S. loss related to the effective settlement of the Framework Agreement between Visa and Visa Europe. These one-time items impacted the geographic mix of our global income, resulting in a reduced effective tax rate in fiscal 2016;
|
▪
|
an $88 million one-time tax benefit due to the remeasurement of deferred tax liabilities as a result of the reduction in the UK tax rate enacted in fiscal 2016; and
|
▪
|
the non-taxable $255 million revaluation of the Visa Europe put option recorded in fiscal 2016.
|
•
|
the effect of one-time items related to the Visa Europe acquisition, as mentioned above, that impacted the geographic mix of global income resulting in a reduced effective tax rate in fiscal 2016;
|
•
|
an $88 million one-time tax benefit due to the remeasurement of deferred tax liabilities as a result of the reduction in the UK tax rate enacted in fiscal 2016;
|
•
|
the non-taxable $255 million revaluation of the Visa Europe put option recorded in fiscal 2016; and
|
•
|
the absence of a $296 million tax benefit recognized in fiscal 2015 resulting from the resolution of uncertain tax positions with taxing authorities. Included in the $296 million was a one-time $239 million tax benefit that related to prior fiscal years.
|
|
Fiscal 2017
|
|||||||||
|
Income Before Income Taxes
|
|
Income Tax Provision
|
|
Effective Income Tax Rate
(1)
|
|||||
|
|
|||||||||
As reported
|
$
|
11,694
|
|
|
$
|
4,995
|
|
|
42.7
|
%
|
Elimination of deferred tax balances
|
—
|
|
|
(1,515
|
)
|
|
|
|||
Charitable contribution
|
192
|
|
|
71
|
|
|
|
|||
As adjusted
|
$
|
11,886
|
|
|
$
|
3,551
|
|
|
29.9
|
%
|
|
Fiscal 2016
|
|||||||||
|
Income Before Income Taxes
|
|
Income Tax Provision
|
|
Effective Income Tax Rate
(1)
|
|||||
|
|
|||||||||
As reported
|
$
|
8,012
|
|
|
$
|
2,021
|
|
|
25.2
|
%
|
Severance cost
|
110
|
|
|
38
|
|
|
|
|||
Remeasurement of deferred tax liability
|
—
|
|
|
88
|
|
|
|
|||
Acquisition-related costs
|
152
|
|
|
56
|
|
|
|
|||
Visa Europe Framework Agreement loss
|
1,877
|
|
|
693
|
|
|
|
|||
Net gains on currency forward contracts
|
(74
|
)
|
|
(27
|
)
|
|
|
|||
Foreign exchange gain on euro deposits
|
(145
|
)
|
|
(54
|
)
|
|
|
|||
Revaluation of Visa Europe put option
|
(255
|
)
|
|
—
|
|
|
|
|||
As adjusted
|
$
|
9,677
|
|
|
$
|
2,815
|
|
|
29.1
|
%
|
(1)
|
Figures in the table may not recalculate exactly due to rounding. Effective income tax rate changes are calculated based on unrounded numbers.
|
•
|
provide adequate liquidity to cover operating expenditures and liquidity contingency scenarios;
|
•
|
ensure timely completion of payments settlement activities;
|
•
|
ensure payments on required litigation settlements;
|
•
|
make planned capital investments in our business;
|
•
|
pay dividends and repurchase our shares at the discretion of our board of directors; and
|
•
|
invest excess cash in securities that enable us to first meet our working capital and liquidity needs, and earn additional income.
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in millions)
|
||||||||||
Total cash provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
9,208
|
|
|
$
|
5,574
|
|
|
$
|
6,584
|
|
Investing activities
|
735
|
|
|
(10,916
|
)
|
|
(1,435
|
)
|
|||
Financing activities
|
(5,924
|
)
|
|
7,477
|
|
|
(3,603
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
236
|
|
|
(34
|
)
|
|
1
|
|
|||
Increase in cash and cash equivalents
|
$
|
4,255
|
|
|
$
|
2,101
|
|
|
$
|
1,547
|
|
•
|
$1.9 billion of the consideration paid in the Visa Europe acquisition during fiscal 2016 related to the effective settlement of the Framework Agreement between us and Visa Europe;
|
•
|
payments of
$489 million
and
$244 million
of interest on the outstanding senior notes during fiscal 2017 and 2016, respectively; and
|
•
|
payments of
$426 million
made from the U.S. litigation escrow account and a related decrease of approximately $157 million of income taxes paid during fiscal 2015.
|
|
Standard and Poor’s
|
|
Moody’s
|
||||
Debt type
|
Rating
|
|
Outlook
|
|
Rating
|
|
Outlook
|
Short-term unsecured debt
|
A-1
|
|
Stable
|
|
P-1
|
|
Stable
|
Long-term unsecured debt
|
A+
|
|
Stable
|
|
A1
|
|
Stable
|
|
Payments Due by Period
|
||||||||||||||||||
|
Less than
1 Year
|
|
1-3
Years
|
|
3-5
Years
|
|
More than
5 Years
|
|
Total
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Long-term debt
(1)
|
$
|
2,298
|
|
|
$
|
1,074
|
|
|
$
|
4,974
|
|
|
$
|
18,386
|
|
|
$
|
26,732
|
|
Purchase orders
(2)
|
827
|
|
|
124
|
|
|
26
|
|
|
2
|
|
|
979
|
|
|||||
Leases
(3)
|
155
|
|
|
187
|
|
|
121
|
|
|
163
|
|
|
626
|
|
|||||
Client incentives
(4)
|
6,306
|
|
|
8,475
|
|
|
6,663
|
|
|
5,344
|
|
|
26,788
|
|
|||||
Marketing and sponsorship
(5)
|
124
|
|
|
235
|
|
|
73
|
|
|
—
|
|
|
432
|
|
|||||
Dividends
(6)
|
459
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
459
|
|
|||||
Deferred purchase consideration
(7)
|
—
|
|
|
1,331
|
|
|
—
|
|
|
—
|
|
|
1,331
|
|
|||||
Total
(8),(9)
|
$
|
10,169
|
|
|
$
|
11,426
|
|
|
$
|
11,857
|
|
|
$
|
23,895
|
|
|
$
|
57,347
|
|
(1)
|
Amounts presented include payments for both interest and principal. Also see
Note 8—Debt
to our consolidated financial statements included in
Item 8—Financial Statements and Supplementary Data
of this report.
|
(2)
|
Represents agreements to purchase goods and services that specify significant terms, including: fixed or minimum quantities to be purchased, minimum or variable price provisions, and the approximate timing of the transaction.
|
(3)
|
Includes operating leases for premises, equipment and software licenses, which range in terms from less than one year to twenty years.
|
(4)
|
Future cash payments for long-term contracts with financial institution clients and other business partners is unknowable due to the inherent unpredictability of payment and transaction volume. These agreements, which range in terms from one to sixteen years, can provide card issuance and/or conversion support, volume/growth targets and marketing and program support based on specific performance requirements. These payment amounts are our best estimates and will likely change materially based on actual client performance, amendments to existing contracts or the execution of new contracts. Related amounts disclosed in
Note 16—Commitments and Contingencies
to our consolidated financial statements represent the associated expected reduction of revenue related to these agreements, which are also estimates that will likely change materially due to the same factors described above.
|
(5)
|
Visa is a party to contractual sponsorship agreements ranging from approximately two to sixteen years. These contracts are designed to increase Visa brand recognition, drive Visa product usage, and differentiate Visa against competition. Over the life of these contracts, Visa is required to make payments in exchange for certain advertising and promotional rights. In connection with these contractual commitments, Visa has an obligation to spend certain minimum amounts for advertising and marketing promotion over the life of the contract. For obligations where the individual years of spend are not specified in the contract, we have estimated the timing of when these amounts will be spent.
|
(6)
|
Includes expected dividend amount of
$459 million
as dividends were declared in
October 2017
and will be paid on
December 5, 2017
to all holders of record of Visa's common stock as of
November 17, 2017
.
|
(7)
|
On June 21, 2016, we acquired 100% of the share capital of Visa Europe. In connection with the purchase, we will pay an additional €1.0 billion, plus 4% compound annual interest, on the third anniversary of the closing of the Visa Europe acquisition. Amount presented was converted to U.S. dollar at the September 30, 2017 exchange rate. See
Note 2—Visa Europe
to our consolidated financial statements included in
Item 8—Financial Statements and Supplementary Data
of this report.
|
(8)
|
We have liabilities for uncertain tax positions of
$1.1 billion
. At September 30, 2017, we had also accrued
$84 million
of interest and
$34 million
of penalties associated with our uncertain tax positions. We cannot determine the range of cash payments that will be made and the timing of the cash settlements, if any, associated with our uncertain tax positions. Therefore, no amounts related to these obligations have been included in the table.
|
(9)
|
We evaluate the need to make contributions to our pension plan after considering the funded status of the pension plan, movements in the discount rate, performance of the plan assets and related tax consequences. Expected contributions to our pension plan have not been included in the table as such amounts are dependent upon the considerations discussed above, and may result in a wide range of amounts. See
Note 9—Pension, Postretirement and Other Benefits
to our consolidated financial statements included in
Item 8—Financial Statements and Supplementary Data
of this report and the
Liquidity and Capital Resources s
ection of this
Management's Discussion and Analysis of Financial Condition and Results of Operations.
|
ITEM 7A.
|
Quantitative and Qualitative Disclosures about Market Risk
|
ITEM 8.
|
Financial Statements and Supplementary Data
|
|
|
|
Page
|
As of September 30, 2017 and 2016 and for the years ended September 30, 2017, 2016 and 2015
|
|
|
|
|
September 30,
2017 |
|
September 30,
2016 |
||||
|
(in millions, except par value data)
|
||||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
9,874
|
|
|
$
|
5,619
|
|
Restricted cash—U.S. litigation escrow (Note 3)
|
1,031
|
|
|
1,027
|
|
||
Investment securities (Note 4):
|
|
|
|
||||
Trading
|
82
|
|
|
71
|
|
||
Available-for-sale
|
3,482
|
|
|
3,248
|
|
||
Settlement receivable
|
1,422
|
|
|
1,467
|
|
||
Accounts receivable
|
1,132
|
|
|
1,041
|
|
||
Customer collateral (Note 10)
|
1,106
|
|
|
1,001
|
|
||
Current portion of client incentives
|
344
|
|
|
284
|
|
||
Prepaid expenses and other current assets
|
550
|
|
|
555
|
|
||
Total current assets
|
19,023
|
|
|
14,313
|
|
||
Investment securities, available-for-sale (Note 4)
|
1,926
|
|
|
3,931
|
|
||
Client incentives
|
591
|
|
|
448
|
|
||
Property, equipment and technology, net (Note 5)
|
2,253
|
|
|
2,150
|
|
||
Other assets
|
1,226
|
|
|
893
|
|
||
Intangible assets, net (Note 2 and Note 6)
|
27,848
|
|
|
27,234
|
|
||
Goodwill (Note 2 and Note 6)
|
15,110
|
|
|
15,066
|
|
||
Total assets
|
$
|
67,977
|
|
|
$
|
64,035
|
|
Liabilities
|
|
|
|
||||
Accounts payable
|
$
|
179
|
|
|
$
|
203
|
|
Settlement payable
|
2,003
|
|
|
2,084
|
|
||
Customer collateral (Note 10)
|
1,106
|
|
|
1,001
|
|
||
Accrued compensation and benefits
|
757
|
|
|
673
|
|
||
Client incentives
|
2,089
|
|
|
1,976
|
|
||
Accrued liabilities (Note 7)
|
1,129
|
|
|
1,128
|
|
||
Current maturities of long-term debt (Note 8)
|
1,749
|
|
|
—
|
|
||
Accrued litigation (Note 19)
|
982
|
|
|
981
|
|
||
Total current liabilities
|
9,994
|
|
|
8,046
|
|
||
Long-term debt (Note 8)
|
16,618
|
|
|
15,882
|
|
||
Deferred tax liabilities (Note 18)
|
5,980
|
|
|
4,808
|
|
||
Deferred purchase consideration
|
1,304
|
|
|
1,225
|
|
||
Other liabilities (Note 7)
|
1,321
|
|
|
1,162
|
|
||
Total liabilities
|
35,217
|
|
|
31,123
|
|
||
Commitments and contingencies (Note 16)
|
|
|
|
||||
|
|
|
|
||||
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 (Note 2 and Note 13)
|
—
|
|
|
—
|
|
||
Series B convertible participating preferred stock, 2 shares issued and outstanding at September 30, 2017 and 2016 (Note 2 and Note 13)
|
2,326
|
|
|
2,516
|
|
||
Series C convertible participating preferred stock, 3 shares issued and outstanding at September 30, 2017and 2016 (Note 2 and Note 13)
|
3,200
|
|
|
3,201
|
|
||
Class A common stock, $0.0001 par value, 2,001,622 shares authorized, 1,818 and 1,871 shares issued and outstanding at September 30, 2017 and 2016, respectively (Note 13)
|
—
|
|
|
—
|
|
||
Class B common stock, $0.0001 par value, 622 shares authorized, 245 shares issued and outstanding at September 30, 2017 and 2016 (Note 13)
|
—
|
|
|
—
|
|
||
Class C common stock, $0.0001 par value, 1,097 shares authorized, 13 and 17 shares issued and outstanding at September 30, 2017 and 2016, respectively (Note 13)
|
—
|
|
|
—
|
|
||
Treasury stock (Note 13)
|
—
|
|
|
(170
|
)
|
||
Right to recover for covered losses (Note 3)
|
(52
|
)
|
|
(34
|
)
|
||
Additional paid-in capital
|
16,900
|
|
|
17,395
|
|
||
Accumulated income
|
9,508
|
|
|
10,462
|
|
||
Accumulated other comprehensive income (loss), net:
|
|
|
|
||||
Investment securities, available-for-sale
|
73
|
|
|
36
|
|
||
Defined benefit pension and other postretirement plans
|
(76
|
)
|
|
(225
|
)
|
||
Derivative instruments classified as cash flow hedges
|
(36
|
)
|
|
(50
|
)
|
||
Foreign currency translation adjustments
|
917
|
|
|
(219
|
)
|
||
Total accumulated other comprehensive income (loss), net
|
878
|
|
|
(458
|
)
|
||
Total equity
|
32,760
|
|
|
32,912
|
|
||
Total liabilities and equity
|
$
|
67,977
|
|
|
$
|
64,035
|
|
|
For the Years Ended
September 30,
|
||||||||||
|
2017
|
|
2016
(1)
|
|
2015
|
||||||
|
(in millions, except per share data)
|
||||||||||
Operating Revenues
|
|
|
|
|
|
||||||
Service revenues
|
$
|
7,975
|
|
|
$
|
6,747
|
|
|
$
|
6,302
|
|
Data processing revenues
|
7,786
|
|
|
6,272
|
|
|
5,552
|
|
|||
International transaction revenues
|
6,321
|
|
|
4,649
|
|
|
4,064
|
|
|||
Other revenues
|
841
|
|
|
823
|
|
|
823
|
|
|||
Client incentives
|
(4,565
|
)
|
|
(3,409
|
)
|
|
(2,861
|
)
|
|||
Net operating revenues
|
18,358
|
|
|
15,082
|
|
|
13,880
|
|
|||
|
|
|
|
|
|
||||||
Operating Expenses
|
|
|
|
|
|
||||||
Personnel
|
2,628
|
|
|
2,226
|
|
|
2,079
|
|
|||
Marketing
|
922
|
|
|
869
|
|
|
872
|
|
|||
Network and processing
|
620
|
|
|
538
|
|
|
474
|
|
|||
Professional fees
|
409
|
|
|
389
|
|
|
336
|
|
|||
Depreciation and amortization
|
556
|
|
|
502
|
|
|
494
|
|
|||
General and administrative
|
1,060
|
|
|
796
|
|
|
547
|
|
|||
Litigation provision (Note 19)
|
19
|
|
|
2
|
|
|
14
|
|
|||
Visa Europe Framework Agreement loss
|
—
|
|
|
1,877
|
|
|
—
|
|
|||
Total operating expenses
|
6,214
|
|
|
7,199
|
|
|
4,816
|
|
|||
Operating income
|
12,144
|
|
|
7,883
|
|
|
9,064
|
|
|||
|
|
|
|
|
|
||||||
Non-operating (Expense) Income
|
|
|
|
|
|
||||||
Interest expense
|
(563
|
)
|
|
(427
|
)
|
|
(3
|
)
|
|||
Other (Note 4 and Note 11)
|
113
|
|
|
556
|
|
|
(66
|
)
|
|||
Total non-operating (expense) income
|
(450
|
)
|
|
129
|
|
|
(69
|
)
|
|||
Income before income taxes
|
11,694
|
|
|
8,012
|
|
|
8,995
|
|
|||
Income tax provision (Note 18)
|
4,995
|
|
|
2,021
|
|
|
2,667
|
|
|||
Net income
|
$
|
6,699
|
|
|
$
|
5,991
|
|
|
$
|
6,328
|
|
|
|
|
|
|
|
||||||
Basic earnings per share (Note 14)
|
|
|
|
|
|
||||||
Class A common stock
|
$
|
2.80
|
|
|
$
|
2.49
|
|
|
$
|
2.58
|
|
Class B common stock
|
$
|
4.62
|
|
|
$
|
4.10
|
|
|
$
|
4.26
|
|
Class C common stock
|
$
|
11.21
|
|
|
$
|
9.94
|
|
|
$
|
10.33
|
|
|
|
|
|
|
|
||||||
Basic weighted-average shares outstanding (Note 14)
|
|
|
|
|
|
||||||
Class A common stock
|
1,845
|
|
|
1,906
|
|
|
1,954
|
|
|||
Class B common stock
|
245
|
|
|
245
|
|
|
245
|
|
|||
Class C common stock
|
14
|
|
|
19
|
|
|
22
|
|
|||
|
|
|
|
|
|
||||||
Diluted earnings per share (Note 14)
|
|
|
|
|
|
||||||
Class A common stock
|
$
|
2.80
|
|
|
$
|
2.48
|
|
|
$
|
2.58
|
|
Class B common stock
|
$
|
4.61
|
|
|
$
|
4.09
|
|
|
$
|
4.25
|
|
Class C common stock
|
$
|
11.19
|
|
|
$
|
9.93
|
|
|
$
|
10.30
|
|
|
|
|
|
|
|
||||||
Diluted weighted-average shares outstanding (Note 14)
|
|
|
|
|
|
||||||
Class A common stock
|
2,395
|
|
|
2,414
|
|
|
2,457
|
|
|||
Class B common stock
|
245
|
|
|
245
|
|
|
245
|
|
|||
Class C common stock
|
14
|
|
|
19
|
|
|
22
|
|
(1)
|
The Company did not include Visa Europe's financial results in the Company's consolidated statements of operations from the acquisition date, June 21, 2016, through June 30, 2016 as the impact was immaterial. The Company's 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. See
Note 2—Visa Europe
.
|
|
For the Years Ended
September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in millions)
|
||||||||||
Net income
|
$
|
6,699
|
|
|
$
|
5,991
|
|
|
$
|
6,328
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Investment securities, available-for-sale:
|
|
|
|
|
|
||||||
Net unrealized gain (loss)
|
60
|
|
|
51
|
|
|
(21
|
)
|
|||
Income tax effect
|
(24
|
)
|
|
(18
|
)
|
|
8
|
|
|||
Reclassification adjustment for net loss (gain) realized in net income
|
1
|
|
|
(3
|
)
|
|
(21
|
)
|
|||
Income tax effect
|
—
|
|
|
1
|
|
|
8
|
|
|||
Defined benefit pension and other postretirement plans:
|
|
|
|
|
|
|
|
||||
Net unrealized actuarial gain (loss) and prior service credit
|
183
|
|
|
(106
|
)
|
|
(122
|
)
|
|||
Income tax effect
|
(54
|
)
|
|
36
|
|
|
45
|
|
|||
Amortization of actuarial loss (gain) and prior service credit realized in net income
|
32
|
|
|
10
|
|
|
(1
|
)
|
|||
Income tax effect
|
(12
|
)
|
|
(4
|
)
|
|
1
|
|
|||
Derivative instruments classified as cash flow hedges:
|
|
|
|
|
|
||||||
Net unrealized (loss) gain
|
(22
|
)
|
|
(74
|
)
|
|
172
|
|
|||
Income tax effect
|
15
|
|
|
9
|
|
|
(51
|
)
|
|||
Reclassification adjustment for net loss (gain) realized in net income
|
33
|
|
|
(103
|
)
|
|
(102
|
)
|
|||
Income tax effect
|
(12
|
)
|
|
35
|
|
|
26
|
|
|||
Foreign currency translation adjustments
|
1,136
|
|
|
(218
|
)
|
|
1
|
|
|||
Other comprehensive income (loss), net of tax
|
1,336
|
|
|
(384
|
)
|
|
(57
|
)
|
|||
Comprehensive income
|
$
|
8,035
|
|
|
$
|
5,607
|
|
|
$
|
6,271
|
|
|
Common Stock
|
|
Additional
Paid-In Capital
|
|
Accumulated
Income
|
|
Accumulated
Other Comprehensive Loss |
|
Total
Equity
|
|||||||||||||||
|
Class A
|
|
Class B
|
|
Class C
|
|
|
|
|
|||||||||||||||
|
(in millions, except per share data)
|
|||||||||||||||||||||||
Balance as of September 30, 2014
|
1,978
|
|
|
245
|
|
|
22
|
|
|
$
|
18,299
|
|
|
$
|
9,131
|
|
|
$
|
(17
|
)
|
|
$
|
27,413
|
|
Net income
|
|
|
|
|
|
|
|
|
6,328
|
|
|
|
|
6,328
|
|
|||||||||
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
|
|
(57
|
)
|
|
(57
|
)
|
|||||||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
6,271
|
|
||||||||||
Conversion of class C common stock upon sale into public market
|
11
|
|
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
—
|
|
||||||||
Issuance and vesting of restricted stock and performance-based shares
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||
Share-based compensation, net of forfeitures (Note 15)
|
(1
|
)
|
(1)
|
|
|
|
|
187
|
|
|
|
|
|
|
187
|
|
||||||||
Restricted stock and performance-based shares settled in cash for taxes
|
(1
|
)
|
|
|
|
|
|
(108
|
)
|
|
|
|
|
|
(108
|
)
|
||||||||
Excess tax benefit for share-based compensation
|
|
|
|
|
|
|
84
|
|
|
|
|
|
|
84
|
|
|||||||||
Cash proceeds from issuance of common stock under employee equity plans
|
3
|
|
|
|
|
|
|
82
|
|
|
|
|
|
|
82
|
|
||||||||
Cash dividends declared and paid, at a quarterly amount of $0.12 per as-converted share
|
|
|
|
|
|
|
|
|
(1,177
|
)
|
|
|
|
(1,177
|
)
|
|||||||||
Repurchase of class A common stock
|
(44
|
)
|
|
|
|
|
|
(471
|
)
|
|
(2,439
|
)
|
|
|
|
(2,910
|
)
|
|||||||
Balance as of September 30, 2015
|
1,950
|
|
|
245
|
|
|
20
|
|
|
$
|
18,073
|
|
|
$
|
11,843
|
|
|
$
|
(74
|
)
|
|
$
|
29,842
|
|
(1)
|
Decrease in Class A common stock related to forfeitures of restricted stock awards.
|
|
Preferred Stock
(1)
|
|
Common Stock
|
|
Preferred Stock
|
|
Treasury Stock
|
|
Right to Recover for Covered Losses
|
|
Additional
Paid-In Capital
|
|
Accumulated
Income
|
|
Accumulated
Other Comprehensive Loss |
|
Total
Equity
|
|||||||||||||||||||||||||
|
Series B
|
|
Series C
|
|
Class A
|
|
Class B
|
|
Class C
|
|
||||||||||||||||||||||||||||||||
|
(in millions, except per share data)
|
|||||||||||||||||||||||||||||||||||||||||
Balance as of September 30, 2015
|
—
|
|
|
—
|
|
|
1,950
|
|
|
245
|
|
|
20
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,073
|
|
|
$
|
11,843
|
|
|
$
|
(74
|
)
|
|
$
|
29,842
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,991
|
|
|
|
|
5,991
|
|
|||||||||||||||||
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(384
|
)
|
|
(384
|
)
|
|||||||||||||||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,607
|
|
||||||||||||||||||
Issuance of preferred stock (Note 2 and Note 13)
|
2
|
|
|
3
|
|
|
|
|
|
|
|
|
5,717
|
|
|
|
|
|
|
|
|
|
|
|
|
5,717
|
|
|||||||||||||||
VE territory covered losses incurred (Note 3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(34
|
)
|
|
|
|
|
|
|
|
(34
|
)
|
|||||||||||||||||
Class C common stock held by Visa Europe, a wholly-owned subsidiary of Visa Inc. (Note 13)
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
(170
|
)
|
|
|
|
|
|
|
|
|
|
(170
|
)
|
||||||||||||||||
Conversion of class C common stock upon sale into public market
|
|
|
|
|
8
|
|
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
||||||||||||||||
Issuance and vesting of restricted stock and performance-based shares
|
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||||||||||
Share-based compensation, net of forfeitures (Note 15)
|
|
|
|
|
—
|
|
(2)
|
|
|
|
|
|
|
|
|
|
|
221
|
|
|
|
|
|
|
221
|
|
||||||||||||||||
Restricted stock and performance-based shares settled in cash for taxes
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(92
|
)
|
|
|
|
|
|
(92
|
)
|
||||||||||||||||
Excess tax benefit for share-based compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
63
|
|
|
|
|
|
|
63
|
|
|||||||||||||||||
Cash proceeds from issuance of common stock under employee equity plans
|
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
95
|
|
|
|
|
|
|
95
|
|
||||||||||||||||
Cash dividends declared and paid, at a quarterly amount of $0.14 per as-converted share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,350
|
)
|
|
|
|
(1,350
|
)
|
|||||||||||||||||
Repurchase of class A common stock (Note 13)
|
|
|
|
|
(91
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(965
|
)
|
|
(6,022
|
)
|
|
|
|
(6,987
|
)
|
|||||||||||||||
Balance as of September 30, 2016
|
2
|
|
|
3
|
|
|
1,871
|
|
|
245
|
|
|
17
|
|
|
$
|
5,717
|
|
|
$
|
(170
|
)
|
|
$
|
(34
|
)
|
|
$
|
17,395
|
|
|
$
|
10,462
|
|
|
$
|
(458
|
)
|
|
$
|
32,912
|
|
(1)
|
Series B and C preferred stock are alternatively referred to as UK&I and Europe preferred stock, respectively.
|
(2)
|
Decrease in Class A common stock related to forfeitures of restricted stock awards is
less than one million
shares.
|
|
Preferred Stock
(1)
|
|
Common Stock
|
|
Preferred Stock
|
|
Treasury Stock
|
|
Right to Recover for Covered Losses
|
|
Additional
Paid-In Capital
|
|
Accumulated
Income
|
|
Accumulated
Other Comprehensive Loss |
|
Total
Equity |
|||||||||||||||||||||||||
|
Series B
|
|
Series C
|
|
Class A
|
|
Class B
|
|
Class C
|
|
||||||||||||||||||||||||||||||||
|
(in millions, except per share data)
|
|||||||||||||||||||||||||||||||||||||||||
Balance as of September 30, 2016
|
2
|
|
|
3
|
|
|
1,871
|
|
|
245
|
|
|
17
|
|
|
$
|
5,717
|
|
|
$
|
(170
|
)
|
|
$
|
(34
|
)
|
|
$
|
17,395
|
|
|
$
|
10,462
|
|
|
$
|
(458
|
)
|
|
$
|
32,912
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,699
|
|
|
|
|
6,699
|
|
|||||||||||||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,336
|
|
|
1,336
|
|
|||||||||||||||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,035
|
|
||||||||||||||||||
VE territory covered losses incurred (Note 3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(209
|
)
|
|
|
|
|
|
|
|
(209
|
)
|
|||||||||||||||||
Recovery through conversion rate adjustment (Note 3 and Note 13)
|
|
|
|
|
|
|
|
|
|
|
(191
|
)
|
|
|
|
191
|
|
|
|
|
|
|
|
|
—
|
|
||||||||||||||||
Charitable contribution of Visa Inc. shares (Note 13 and Note 18)
|
|
|
|
|
2
|
|
|
|
|
|
|
|
|
170
|
|
|
|
|
|
|
|
|
|
|
170
|
|
||||||||||||||||
Treasury stock appreciation, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14
|
|
|
|
|
|
|
14
|
|
|||||||||||||||||
Conversion of class C common stock upon sales into public market
|
|
|
|
|
17
|
|
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
||||||||||||||||
Issuance and vesting of restricted stock and performance-based shares
|
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||||||||||
Share-based compensation, net of forfeitures (Note 15)
|
|
|
|
|
—
|
|
(2)
|
|
|
|
|
|
|
|
|
|
|
235
|
|
|
|
|
|
|
235
|
|
||||||||||||||||
Restricted stock and performance-based shares settled in cash for taxes
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(76
|
)
|
|
|
|
|
|
(76
|
)
|
||||||||||||||||
Cash proceeds from issuance of common stock under employee equity plans
|
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
149
|
|
|
|
|
|
|
149
|
|
||||||||||||||||
Cash dividends declared and paid, at a quarterly amount of $0.165 per as-converted share (Note 13)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,579
|
)
|
|
|
|
(1,579
|
)
|
|||||||||||||||||
Repurchase of class A common stock (Note 13)
|
|
|
|
|
(77
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(817
|
)
|
|
(6,074
|
)
|
|
|
|
(6,891
|
)
|
|||||||||||||||
Balance as of September 30, 2017
|
2
|
|
|
3
|
|
|
1,818
|
|
|
245
|
|
|
13
|
|
|
$
|
5,526
|
|
|
$
|
—
|
|
|
$
|
(52
|
)
|
|
$
|
16,900
|
|
|
$
|
9,508
|
|
|
$
|
878
|
|
|
$
|
32,760
|
|
(1)
|
Series B and C preferred stock are alternatively referred to as UK&I and Europe preferred stock, respectively.
|
(2)
|
Decrease in Class A common stock related to forfeitures of restricted stock awards is
less than one million
shares.
|
|
For the Years Ended
September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in millions, except noted otherwise)
|
||||||||||
Operating Activities
|
|
|
|
|
|
||||||
Net income
|
$
|
6,699
|
|
|
$
|
5,991
|
|
|
$
|
6,328
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Client incentives
|
4,565
|
|
|
3,409
|
|
|
2,861
|
|
|||
Fair value adjustment for the Visa Europe put option
|
—
|
|
|
(255
|
)
|
|
110
|
|
|||
Share-based compensation (Note 15)
|
235
|
|
|
221
|
|
|
187
|
|
|||
Excess tax benefit for share-based compensation
|
—
|
|
|
(63
|
)
|
|
(84
|
)
|
|||
Depreciation and amortization of property, equipment, technology and intangible assets
|
556
|
|
|
502
|
|
|
494
|
|
|||
Deferred income taxes
|
1,700
|
|
|
(764
|
)
|
|
195
|
|
|||
Right to recover for covered losses recorded in equity (Note 3)
|
(209
|
)
|
|
(9
|
)
|
|
—
|
|
|||
Charitable contribution of Visa Inc. shares (Note 13 and Note 18)
|
192
|
|
|
—
|
|
|
—
|
|
|||
Other
|
50
|
|
|
64
|
|
|
24
|
|
|||
Change in operating assets and liabilities:
|
|
|
|
|
|
||||||
Settlement receivable
|
94
|
|
|
391
|
|
|
378
|
|
|||
Accounts receivable
|
(54
|
)
|
|
(65
|
)
|
|
(19
|
)
|
|||
Client incentives
|
(4,628
|
)
|
|
(3,508
|
)
|
|
(2,970
|
)
|
|||
Other assets
|
(252
|
)
|
|
(315
|
)
|
|
(41
|
)
|
|||
Accounts payable
|
(30
|
)
|
|
43
|
|
|
(13
|
)
|
|||
Settlement payable
|
(176
|
)
|
|
(302
|
)
|
|
(552
|
)
|
|||
Accrued and other liabilities
|
465
|
|
|
277
|
|
|
118
|
|
|||
Accrued litigation (Note 19)
|
1
|
|
|
(43
|
)
|
|
(432
|
)
|
|||
Net cash provided by operating activities
|
9,208
|
|
|
5,574
|
|
|
6,584
|
|
|||
Investing Activities
|
|
|
|
|
|
||||||
Purchases of property, equipment, technology and intangible assets
|
(707
|
)
|
|
(523
|
)
|
|
(414
|
)
|
|||
Proceeds from sales of property, equipment and technolog
y
|
12
|
|
|
—
|
|
|
10
|
|
|||
Investment securities, available-for-sale:
|
|
|
|
|
|
||||||
Purchases
|
(3,238
|
)
|
|
(10,426
|
)
|
|
(2,850
|
)
|
|||
Proceeds from maturities and sales
|
5,012
|
|
|
9,119
|
|
|
1,925
|
|
|||
Acquisitions, net of $2.8 billion cash received from Visa Europe (Note 2)
|
(302
|
)
|
|
(9,082
|
)
|
|
(93
|
)
|
|||
Purchases of / contributions to other investments
|
(46
|
)
|
|
(10
|
)
|
|
(25
|
)
|
|||
Proceeds / distributions from other investments
|
4
|
|
|
6
|
|
|
12
|
|
|||
Net cash provided by (used in) investing activities
|
735
|
|
|
(10,916
|
)
|
|
(1,435
|
)
|
|||
Financing Activities
|
|
|
|
|
|
||||||
Repurchase of class A common stock (Note 13)
|
(6,891
|
)
|
|
(6,987
|
)
|
|
(2,910
|
)
|
|||
Treasury stock—class C common stock (Note 13)
|
—
|
|
|
(170
|
)
|
|
—
|
|
|||
Dividends paid
(Note 13)
|
(1,579
|
)
|
|
(1,350
|
)
|
|
(1,177
|
)
|
|||
Proceeds from issuance of senior notes (Note 8)
|
2,488
|
|
|
15,971
|
|
|
—
|
|
|||
Debt issuance costs (Note 8)
|
(15
|
)
|
|
(98
|
)
|
|
—
|
|
|||
Payments from U.S. litigation escrow account—U.S. retrospective responsibility plan (Note 3 and Note 19)
|
—
|
|
|
45
|
|
|
426
|
|
|||
Cash proceeds from issuance of common stock under employee equity plans
|
149
|
|
|
95
|
|
|
82
|
|
|||
Restricted stock and performance-based shares settled in cash for taxes
|
(76
|
)
|
|
(92
|
)
|
|
(108
|
)
|
|||
Excess tax benefit for share-based compensation
|
—
|
|
|
63
|
|
|
84
|
|
|||
Net cash (used in) provided by financing activities
|
(5,924
|
)
|
|
7,477
|
|
|
(3,603
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
236
|
|
|
(34
|
)
|
|
1
|
|
|||
Increase in cash and cash equivalents
|
4,255
|
|
|
2,101
|
|
|
1,547
|
|
|||
Cash and cash equivalents at beginning of year
|
5,619
|
|
|
3,518
|
|
|
1,971
|
|
|||
Cash and cash equivalents at end of year
|
$
|
9,874
|
|
|
$
|
5,619
|
|
|
$
|
3,518
|
|
Supplemental Disclosure
|
|
|
|
|
|
||||||
Series B and C convertible participating preferred stock issued in Visa Europe acquisition (Note 3)
|
$
|
—
|
|
|
$
|
5,717
|
|
|
$
|
—
|
|
Deferred purchase consideration recorded for Visa Europe acquisition (Note 2)
|
$
|
—
|
|
|
$
|
1,236
|
|
|
$
|
—
|
|
Income taxes paid, net of refunds
|
$
|
3,038
|
|
|
$
|
2,842
|
|
|
$
|
2,486
|
|
Interest payments on debt
|
$
|
489
|
|
|
$
|
244
|
|
|
$
|
—
|
|
Accruals related to purchases of property, equipment, technology and intangible
assets
|
$
|
50
|
|
|
$
|
42
|
|
|
$
|
81
|
|
•
|
The Company recorded excess tax benefits of
$70 million
in its provision for income taxes rather than as an increase to additional paid-in capital for the year ended
September 30, 2017
on a prospective basis. Therefore, the prior period presented has not been adjusted.
|
•
|
The Company excluded the excess tax benefits from the assumed proceeds available to repurchase shares in the computation of diluted earnings per share, which did not have a material impact on the Company's diluted earnings per share for the year ended
September 30, 2017
.
|
•
|
The Company elected to apply the presentation requirement for cash flows related to excess tax benefits prospectively, and thus, the prior period presented has not been adjusted. This adoption resulted in an increase to both net cash provided by operating activities and net cash used in financing of
$70 million
for the year ended
September 30, 2017
.
|
•
|
issued preferred stock of the Company convertible upon certain conditions into approximately
79 million
shares of class A common stock of the Company, as described below, equivalent to a value of €
5.3 billion
(
$6.1 billion
) at the closing stock price of
$77.33
on June 21, 2016; and
|
•
|
agreed to pay an additional €
1.0 billion
, plus
4%
compound annual interest, on the third anniversary of the Closing.
|
•
|
series A convertible participating preferred stock, par value
$0.0001
per share, which is generally designed to be economically equivalent to the Company’s class A common stock (the “class A equivalent preferred stock”);
|
•
|
series B convertible participating preferred stock, par value
$0.0001
per share (the “UK&I preferred stock”); and
|
•
|
series C convertible participating preferred stock, par value
$0.0001
per share (the “Europe preferred stock”).
|
|
Preliminary Purchase Price Allocation
|
|
Measurement Period Adjustments
|
|
Final Purchase Price Allocation
|
||||||
|
(in millions)
|
||||||||||
Current assets
(1)
|
$
|
4,457
|
|
|
$
|
—
|
|
|
$
|
4,457
|
|
Non-current assets
(2)
|
258
|
|
|
(46
|
)
|
|
212
|
|
|||
Current liabilities
(3)
|
(2,731
|
)
|
|
(36
|
)
|
|
(2,767
|
)
|
|||
Non-current liabilities
(2)
|
(2,605
|
)
|
|
607
|
|
|
(1,998
|
)
|
|||
Tangible assets and liabilities
|
(621
|
)
|
|
525
|
|
|
(96
|
)
|
|||
Intangible assets — customer relationships and reacquired rights
(2)
|
16,137
|
|
|
(232
|
)
|
|
15,905
|
|
|||
Goodwill
(4)
|
3,268
|
|
|
(293
|
)
|
|
2,975
|
|
|||
Fair value of net assets acquired
|
$
|
18,784
|
|
|
$
|
—
|
|
|
$
|
18,784
|
|
(1)
|
Current assets are largely comprised of cash and cash equivalents and settlement receivable.
|
(2)
|
Intangible assets consist of customer relationships and reacquired rights, which have been valued as a single composite intangible asset as they are inextricably linked. These intangibles are considered indefinite-lived assets as the associated customer relationships have historically not experienced significant attrition, and the reacquired rights are based on the Framework Agreement, which has a perpetual term. Non-current assets and liabilities include deferred tax assets and liabilities that result in net deferred tax liabilities of
$1.7 billion
, which are primarily related to these indefinite-lived intangible assets, based on the final valuation. In February 2017, the Company completed a legal entity reorganization, resulting in the elimination of most of these deferred tax assets and liabilities. See
Note 18—Income Taxes
.
|
(3)
|
Current liabilities assumed mainly include settlement payable, client incentives liabilities and accrued liabilities.
|
(4)
|
The excess of purchase consideration over net assets acquired was recorded as goodwill, which represents the value that is expected from increased scale and synergies as a result of the integration of both businesses.
|
•
|
the Interchange Multidistrict Litigation
. In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, 1:05-md-01720-JG-JO (E.D.N.Y.) or MDL 1720, including all cases currently included in MDL 1720, any other case that includes claims for damages relating to the period prior to the Company's IPO that has been or is transferred for coordinated or consolidated pre-trial proceedings at any time to MDL 1720 by the Judicial Panel on Multidistrict Litigation or otherwise included at any time in MDL 1720 by order of any court of competent jurisdiction;
|
•
|
any claim that challenges the reorganization or the consummation thereof; provided that such claim is transferred for coordinated or consolidated pre-trial proceedings at any time to MDL 1720 by the Judicial Panel on Multidistrict Litigation or otherwise included at any time in MDL 1720 by order of any court of competent jurisdiction; and
|
•
|
any case brought after October 22, 2015, by a merchant that opted out of the Rule 23(b)(3) settlement class pursuant to the 2012 Settlement Agreement in MDL 1720 that arises out of facts or circumstances substantially similar to those alleged in MDL 1720 and that is not transferred to or otherwise included in MDL 1720. See
Note 19—Legal Matters
.
|
|
Fiscal 2017
|
|
Fiscal 2016
|
||||
|
(in millions)
|
||||||
Balance at October 1
|
$
|
1,027
|
|
|
$
|
1,072
|
|
Payments to opt-out merchants and interest earned on escrow funds
(1)
|
4
|
|
|
(45
|
)
|
||
Balance at September 30
|
$
|
1,031
|
|
|
$
|
1,027
|
|
(1)
|
These payments are associated with the interchange multidistrict litigation. See
Note 19—Legal Matters
.
|
|
Preferred Stock
|
|
Right to Recover for Covered Losses
|
||||||||
|
UK&I
|
|
Europe
|
|
|||||||
|
(in millions)
|
||||||||||
Balance as of September 30, 2016
|
$
|
2,516
|
|
|
$
|
3,201
|
|
|
$
|
(34
|
)
|
VE territory covered losses incurred
|
—
|
|
|
—
|
|
|
(209
|
)
|
|||
Recovery through conversion rate adjustment
|
(190
|
)
|
|
(1
|
)
|
|
191
|
|
|||
Balance as of September 30, 2017
|
$
|
2,326
|
|
|
$
|
3,200
|
|
|
$
|
(52
|
)
|
|
September 30, 2017
|
|
September 30, 2016
|
||||||||||||
|
As-Converted Value of Preferred Stock
(2)
|
|
Book Value of Preferred Stock
|
|
As-Converted Value of Preferred Stock
(3)
|
|
Book Value of Preferred Stock
|
||||||||
|
(in millions)
|
||||||||||||||
UK&I preferred stock
|
$
|
3,414
|
|
|
$
|
2,326
|
|
|
$
|
2,862
|
|
|
$
|
2,516
|
|
Europe preferred stock
|
4,634
|
|
|
3,200
|
|
|
3,642
|
|
|
3,201
|
|
||||
Total
|
8,048
|
|
|
5,526
|
|
|
6,504
|
|
|
5,717
|
|
||||
Less: right to recover for covered losses
|
(52
|
)
|
|
(52
|
)
|
|
(34
|
)
|
|
(34
|
)
|
||||
Total recovery for covered losses available
|
$
|
7,996
|
|
|
$
|
5,474
|
|
|
$
|
6,470
|
|
|
$
|
5,683
|
|
(1)
|
Figures in the table may not recalculate exactly due to rounding. As-converted and book values of preferred stock are based on unrounded numbers.
|
(2)
|
The as-converted value of preferred stock is calculated as the product of: (a)
2 million
and
3 million
shares of the UK&I and Europe preferred stock outstanding, respectively, as of September 30, 2017; (b)
13.077
and
13.948
, the class A common stock conversion rate applicable to the UK&I and Europe preferred stock outstanding, respectively, as of September 30, 2017; and (c)
$105.24
, Visa's class A common stock closing stock price as of September 30, 2017. Earnings per share is calculated based on unrounded numbers.
|
(3)
|
The as-converted value of preferred stock is calculated as the product of: (a)
2 million
and
3 million
shares of the UK&I and Europe preferred stock outstanding, respectively, as of September 30, 2016; (b) the
13.952
class A common stock conversion rate applicable to both the UK&I and Europe preferred stock as of September 30, 2016; and (c)
$82.70
, Visa's class A common stock closing stock price as of September 30, 2016. Earnings per share is calculated based on unrounded numbers.
|
|
Fair Value Measurements at September 30
Using Inputs Considered as
|
||||||||||||||
|
Level 1
|
|
Level 2
|
||||||||||||
|
September 30, 2017
|
|
September 30, 2016
|
|
September 30, 2017
|
|
September 30, 2016
|
||||||||
|
(in millions)
|
||||||||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash equivalents and restricted cash:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
5,935
|
|
|
$
|
4,537
|
|
|
|
|
|
||||
U.S. government-sponsored debt securities
|
|
|
|
|
$
|
2,870
|
|
|
$
|
196
|
|
||||
Investment securities, trading:
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
$
|
82
|
|
|
$
|
71
|
|
|
|
|
|
||||
Investment securities, available-for-sale:
|
|
|
|
|
|
|
|
||||||||
U.S. government-sponsored debt securities
|
|
|
|
|
3,663
|
|
|
4,699
|
|
||||||
U.S. Treasury securities
|
1,621
|
|
|
2,178
|
|
|
|
|
|
||||||
Equity securities
|
124
|
|
|
53
|
|
|
|
|
|
||||||
Corporate debt securities
|
|
|
|
|
—
|
|
|
249
|
|
||||||
Prepaid and other current assets:
|
|
|
|
|
|
|
|
||||||||
Foreign exchange derivative instruments
|
|
|
|
|
18
|
|
|
50
|
|
||||||
Other Assets:
|
|
|
|
|
|
|
|
||||||||
Foreign exchange derivative instruments
|
|
|
|
|
|
|
|
6
|
|
||||||
Total
|
$
|
7,762
|
|
|
$
|
6,839
|
|
|
$
|
6,551
|
|
|
$
|
5,200
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Accrued liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign exchange derivative instruments
|
|
|
|
|
$
|
98
|
|
|
$
|
116
|
|
||||
Other liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign exchange derivative instruments
|
|
|
|
|
—
|
|
|
20
|
|
||||||
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
98
|
|
|
$
|
136
|
|
|
September 30, 2017
|
|
September 30, 2016
|
||||||||||||
|
Carrying Amount
|
|
Estimated Fair Value
|
|
Carrying Amount
|
|
Estimated Fair Value
|
||||||||
|
(in millions)
|
||||||||||||||
1.20% Senior Notes due December 2017
|
$
|
1,749
|
|
|
$
|
1,751
|
|
|
$
|
1,746
|
|
|
$
|
1,754
|
|
2.20% Senior Notes due December 2020
|
2,990
|
|
|
3,031
|
|
|
2,988
|
|
|
3,077
|
|
||||
2.15% Senior Notes due September 2022
|
993
|
|
|
997
|
|
|
—
|
|
|
—
|
|
||||
2.80% Senior Notes due December 2022
|
2,240
|
|
|
2,301
|
|
|
2,238
|
|
|
2,359
|
|
||||
3.15% Senior Notes due December 2025
|
3,967
|
|
|
4,098
|
|
|
3,964
|
|
|
4,225
|
|
||||
2.75% Senior Notes due September 2027
|
740
|
|
|
737
|
|
|
—
|
|
|
—
|
|
||||
4.15% Senior Notes due December 2035
|
1,485
|
|
|
1,637
|
|
|
1,485
|
|
|
1,698
|
|
||||
4.30% Senior Notes due December 2045
|
3,463
|
|
|
3,873
|
|
|
3,461
|
|
|
4,045
|
|
||||
3.65% Senior Notes due September 2047
|
740
|
|
|
746
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
18,367
|
|
|
$
|
19,171
|
|
|
$
|
15,882
|
|
|
$
|
17,158
|
|
|
September 30, 2017
|
|
September 30, 2016
|
||||||||||||||||||||||||||||
|
Amortized
Cost
|
|
Gross Unrealized
|
|
Fair
Value
|
|
Amortized
Cost
|
|
Gross Unrealized
|
|
Fair
Value
|
||||||||||||||||||||
|
Gains
|
|
Losses
|
|
Gains
|
|
Losses
|
|
|||||||||||||||||||||||
|
(in millions)
|
||||||||||||||||||||||||||||||
U.S. government-sponsored debt securities
|
$
|
3,664
|
|
|
$
|
1
|
|
|
$
|
(2
|
)
|
|
$
|
3,663
|
|
|
$
|
4,693
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
4,699
|
|
U.S. Treasury securities
|
1,623
|
|
|
—
|
|
|
(2
|
)
|
|
1,621
|
|
|
2,176
|
|
|
3
|
|
|
—
|
|
|
2,179
|
|
||||||||
Equity securities
|
5
|
|
|
119
|
|
|
—
|
|
|
124
|
|
|
7
|
|
|
46
|
|
|
—
|
|
|
53
|
|
||||||||
Corporate debt securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
248
|
|
|
—
|
|
|
—
|
|
|
248
|
|
||||||||
Auction rate securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total
|
$
|
5,292
|
|
|
$
|
120
|
|
|
$
|
(4
|
)
|
|
$
|
5,408
|
|
|
$
|
7,124
|
|
|
$
|
55
|
|
|
$
|
—
|
|
|
$
|
7,179
|
|
Less: current portion of available-for-sale investment securities
|
|
|
|
|
|
|
$
|
(3,482
|
)
|
|
|
|
|
|
|
|
$
|
(3,248
|
)
|
||||||||||||
Long-term available-for-sale investment securities
|
|
|
|
|
|
|
$
|
1,926
|
|
|
|
|
|
|
|
|
$
|
3,931
|
|
|
Amortized Cost
|
|
Fair Value
|
||||
|
(in millions)
|
||||||
September 30, 2017:
|
|
|
|
||||
Due within one year
|
$
|
3,360
|
|
|
$
|
3,358
|
|
Due after 1 year through 5 years
|
1,927
|
|
|
1,926
|
|
||
Due after 5 years through 10 years
|
—
|
|
|
—
|
|
||
Due after 10 years
|
—
|
|
|
—
|
|
||
Total
|
$
|
5,287
|
|
|
$
|
5,284
|
|
|
For the Years Ended
September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in millions)
|
||||||||||
Interest and dividend income on cash and investments
|
$
|
92
|
|
|
$
|
75
|
|
|
$
|
31
|
|
Gain on other investments
|
6
|
|
|
5
|
|
|
3
|
|
|||
Investment securities, trading:
|
|
|
|
|
|
||||||
Unrealized gains (losses), net
|
6
|
|
|
3
|
|
|
(6
|
)
|
|||
Realized gains, net
|
2
|
|
|
—
|
|
|
2
|
|
|||
Investment securities, available-for-sale:
|
|
|
|
|
|
||||||
Realized (losses) gains, net
|
(1
|
)
|
|
3
|
|
|
21
|
|
|||
Other-than-temporary impairment on investments
|
—
|
|
|
(4
|
)
|
|
(5
|
)
|
|||
Investment income
|
$
|
105
|
|
|
$
|
82
|
|
|
$
|
46
|
|
|
September 30,
2017 |
|
September 30,
2016 |
||||
|
(in millions)
|
||||||
Land
|
$
|
72
|
|
|
$
|
74
|
|
Buildings and building improvements
|
865
|
|
|
839
|
|
||
Furniture, equipment and leasehold improvements
|
1,534
|
|
|
1,382
|
|
||
Construction-in-progress
|
139
|
|
|
125
|
|
||
Technology
|
2,533
|
|
|
2,378
|
|
||
Total property, equipment and technology
|
5,143
|
|
|
4,798
|
|
||
Accumulated depreciation and amortization
|
(2,890
|
)
|
|
(2,648
|
)
|
||
Property, equipment and technology, net
|
$
|
2,253
|
|
|
$
|
2,150
|
|
Fiscal:
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022 and thereafter
|
|
Total
|
||||||||||||
|
|
(in millions)
|
||||||||||||||||||||||
Estimated future amortization expense
|
|
$
|
265
|
|
|
$
|
222
|
|
|
$
|
159
|
|
|
$
|
107
|
|
|
$
|
76
|
|
|
$
|
829
|
|
|
September 30, 2017
|
|
September 30, 2016
|
||||||||||||||||||||
|
Gross
|
|
Accumulated
Amortization
|
|
Net
|
|
Gross
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Finite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer relationships
|
$
|
438
|
|
|
$
|
(237
|
)
|
|
$
|
201
|
|
|
$
|
351
|
|
|
$
|
(220
|
)
|
|
$
|
131
|
|
Trade names
|
195
|
|
|
(93
|
)
|
|
102
|
|
|
192
|
|
|
(80
|
)
|
|
112
|
|
||||||
Reseller relationships
|
95
|
|
|
(79
|
)
|
|
16
|
|
|
95
|
|
|
(70
|
)
|
|
25
|
|
||||||
Other
|
17
|
|
|
(9
|
)
|
|
8
|
|
|
18
|
|
|
(9
|
)
|
|
9
|
|
||||||
Total finite-lived intangible assets
|
745
|
|
|
(418
|
)
|
|
327
|
|
|
656
|
|
|
(379
|
)
|
|
277
|
|
||||||
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Customer relationships and reacquired rights
|
23,437
|
|
|
—
|
|
|
23,437
|
|
|
22,873
|
|
|
—
|
|
|
22,873
|
|
||||||
Visa trade name
|
4,084
|
|
|
—
|
|
|
4,084
|
|
|
4,084
|
|
|
—
|
|
|
4,084
|
|
||||||
Total indefinite-lived intangible assets
|
27,521
|
|
|
—
|
|
|
27,521
|
|
|
26,957
|
|
|
—
|
|
|
26,957
|
|
||||||
Total intangible assets
|
$
|
28,266
|
|
|
$
|
(418
|
)
|
|
$
|
27,848
|
|
|
$
|
27,613
|
|
|
$
|
(379
|
)
|
|
$
|
27,234
|
|
Fiscal:
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022 and
thereafter
|
|
Total
|
||||||||||||
|
|
(in millions)
|
||||||||||||||||||||||
Estimated future amortization expense
|
|
$
|
40
|
|
|
$
|
40
|
|
|
$
|
40
|
|
|
$
|
40
|
|
|
$
|
71
|
|
|
$
|
231
|
|
|
September 30,
2017 |
|
September 30,
2016 |
||||
|
(in millions)
|
||||||
Accrued operating expenses
|
$
|
434
|
|
|
$
|
347
|
|
Accrued interest expenses
|
149
|
|
|
145
|
|
||
Accrued income taxes (See
Note 18—Income Taxes
)
|
243
|
|
|
153
|
|
||
Other
|
303
|
|
|
483
|
|
||
Total
|
$
|
1,129
|
|
|
$
|
1,128
|
|
|
September 30,
2017 |
|
September 30,
2016 |
||||
|
(in millions)
|
||||||
Accrued income taxes (See
Note 18—Income Taxes
)
|
$
|
1,092
|
|
|
$
|
911
|
|
Employee benefits
|
62
|
|
|
137
|
|
||
Other
|
167
|
|
|
114
|
|
||
Total
|
$
|
1,321
|
|
|
$
|
1,162
|
|
|
September 30, 2017
|
|
September 30, 2016
|
|
|
|||||||||||||||||||||
|
Principal Amount
|
|
Unamortized Discounts and Debt Issuance Costs
|
|
Carrying Amount
|
|
Principal Amount
|
|
Unamortized Discounts and Debt Issuance Costs
|
|
Carrying Amount
|
|
Effective Interest Rate
|
|||||||||||||
|
(in millions, except percentages)
|
|||||||||||||||||||||||||
1.20% Senior Notes due 2017 (the "2017 Notes")
|
$
|
1,750
|
|
|
$
|
(1
|
)
|
|
$
|
1,749
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
1.37
|
%
|
Total current maturities of long-term debt
|
1,750
|
|
|
(1
|
)
|
|
1,749
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
1.20% Senior Notes due 2017 (the "2017 Notes")
|
—
|
|
|
—
|
|
|
—
|
|
|
1,750
|
|
|
(4
|
)
|
|
1,746
|
|
|
1.37
|
%
|
||||||
2.20% Senior Notes due 2020 (the "2020 Notes")
|
3,000
|
|
|
(10
|
)
|
|
2,990
|
|
|
3,000
|
|
|
(12
|
)
|
|
2,988
|
|
|
2.30
|
%
|
||||||
2.15% Senior Notes due September 2022 (the "September 2022 Notes")
|
1,000
|
|
|
(7
|
)
|
|
993
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.30
|
%
|
||||||
2.80% Senior Notes due December 2022 (the "December 2022 Notes")
|
2,250
|
|
|
(10
|
)
|
|
2,240
|
|
|
2,250
|
|
|
(12
|
)
|
|
2,238
|
|
|
2.89
|
%
|
||||||
3.15% Senior Notes due 2025 (the "2025 Notes")
|
4,000
|
|
|
(33
|
)
|
|
3,967
|
|
|
4,000
|
|
|
(36
|
)
|
|
3,964
|
|
|
3.26
|
%
|
||||||
2.75% Senior Notes due 2027 (the "2027 Notes")
|
750
|
|
|
(10
|
)
|
|
740
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.91
|
%
|
||||||
4.15% Senior Notes due 2035 (the "2035 Notes")
|
1,500
|
|
|
(15
|
)
|
|
1,485
|
|
|
1,500
|
|
|
(15
|
)
|
|
1,485
|
|
|
4.23
|
%
|
||||||
4.30% Senior Notes due 2045 (the "2045 Notes")
|
3,500
|
|
|
(37
|
)
|
|
3,463
|
|
|
3,500
|
|
|
(39
|
)
|
|
3,461
|
|
|
4.37
|
%
|
||||||
3.65% Senior Notes due 2047 (the "2047 Notes")
|
750
|
|
|
(10
|
)
|
|
740
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.73
|
%
|
||||||
Total long-term debt
|
16,750
|
|
|
(132
|
)
|
|
16,618
|
|
|
16,000
|
|
|
(118
|
)
|
|
15,882
|
|
|
|
|||||||
Total debt
|
$
|
18,500
|
|
|
$
|
(133
|
)
|
|
$
|
18,367
|
|
|
$
|
16,000
|
|
|
$
|
(118
|
)
|
|
$
|
15,882
|
|
|
|
•
|
100%
of the principal amount of such Notes; and
|
•
|
the sum of the present value of the remaining scheduled payments of principal and interest through the maturity or par call date for each of the Notes below at the treasury rate defined under the terms of the Notes, plus the applicable spread for such Notes (as set forth in the table below),
|
Series
|
|
Maturity/Par Call Date
|
|
Spread
|
2020 Notes
|
|
November 14, 2020
|
|
10 bps
|
September 2022 Notes
|
|
August 15, 2022
|
|
10 bps
|
December 2022 Notes
|
|
October 14, 2022
|
|
12.5 bps
|
2025 Notes
|
|
September 14, 2025
|
|
15 bps
|
2027 Notes
|
|
June 15, 2027
|
|
12.5 bps
|
2035 Notes
|
|
June 14, 2035
|
|
20 bps
|
2045 Notes
|
|
June 14, 2045
|
|
20 bps
|
2047 Notes
|
|
March 15, 2047
|
|
15 bps
|
Fiscal Year
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|
Total
|
||||||||||||||
(in millions)
|
$
|
1,750
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,000
|
|
|
$
|
1,000
|
|
|
$
|
12,750
|
|
|
$
|
18,500
|
|
•
|
a financial covenant which requires the Company to maintain a Consolidated Indebtedness to Consolidated EBITDA Ratio (as defined in the Credit Facility) of not greater than
3.75
to
1.00
;
|
•
|
customary restrictive covenants, which limit the Borrowers' ability to, among other things, create certain liens, effect fundamental changes to their business, or merge or dispose substantially all of their assets, subject in each case to customary exceptions and amounts;
|
•
|
customary events of default, upon the occurrence of which, after any applicable grace period, the requisite lenders will have the ability to accelerate all outstanding loans thereunder and terminate the commitments; and
|
•
|
other customary and standard terms and conditions.
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||||||||||||||||||
|
Pension Benefits
|
|
Other
Postretirement Benefits
|
|
Pension Benefits
|
||||||||||||||||||
|
September 30,
|
|
September 30,
|
|
September 30,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Benefit obligation—beginning of fiscal year
|
$
|
1,072
|
|
|
$
|
1,005
|
|
|
$
|
14
|
|
|
$
|
18
|
|
|
$
|
474
|
|
|
$
|
—
|
|
Visa Europe acquisition
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
381
|
|
||||||
Service cost
|
—
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
1
|
|
||||||
Interest cost
|
36
|
|
|
40
|
|
|
1
|
|
|
1
|
|
|
11
|
|
|
3
|
|
||||||
Actuarial loss (gain)
|
(58
|
)
|
|
86
|
|
|
(1
|
)
|
|
(2
|
)
|
|
(52
|
)
|
|
86
|
|
||||||
Benefit payments
|
(137
|
)
|
|
(64
|
)
|
|
(3
|
)
|
|
(3
|
)
|
|
(14
|
)
|
|
(1
|
)
|
||||||
Plan amendment
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Foreign currency exchange rate changes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
4
|
|
||||||
Benefit obligation—end of fiscal year
|
$
|
913
|
|
|
$
|
1,072
|
|
|
$
|
11
|
|
|
$
|
14
|
|
|
$
|
433
|
|
|
$
|
474
|
|
Accumulated benefit obligation
|
$
|
913
|
|
|
$
|
1,072
|
|
|
NA
|
|
|
NA
|
|
|
$
|
433
|
|
|
$
|
474
|
|
||
Change in Plan Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fair value of plan assets—beginning of fiscal year
|
$
|
1,077
|
|
|
$
|
1,022
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
415
|
|
|
$
|
—
|
|
Visa Europe acquisition
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
287
|
|
||||||
Actual return on plan assets
|
125
|
|
|
118
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
25
|
|
||||||
Company contribution
|
9
|
|
|
1
|
|
|
3
|
|
|
3
|
|
|
5
|
|
|
102
|
|
||||||
Benefit payments
|
(137
|
)
|
|
(64
|
)
|
|
(3
|
)
|
|
(3
|
)
|
|
(14
|
)
|
|
(1
|
)
|
||||||
Foreign currency exchange rate changes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
2
|
|
||||||
Fair value of plan assets—end of fiscal year
|
$
|
1,074
|
|
|
$
|
1,077
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
433
|
|
|
$
|
415
|
|
Funded status at end of fiscal year
|
$
|
161
|
|
|
$
|
5
|
|
|
$
|
(11
|
)
|
|
$
|
(14
|
)
|
|
$
|
—
|
|
|
$
|
(59
|
)
|
Recognized in Consolidated Balance Sheets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Non-current asset
|
$
|
168
|
|
|
$
|
22
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Current liability
|
(1
|
)
|
|
(9
|
)
|
|
(2
|
)
|
|
(3
|
)
|
|
(5
|
)
|
|
(6
|
)
|
||||||
Non-current liability
|
(6
|
)
|
|
(8
|
)
|
|
(9
|
)
|
|
(11
|
)
|
|
5
|
|
|
(53
|
)
|
||||||
Funded status at end of fiscal year
|
$
|
161
|
|
|
$
|
5
|
|
|
$
|
(11
|
)
|
|
$
|
(14
|
)
|
|
$
|
—
|
|
|
$
|
(59
|
)
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||||||||||||||||||
|
Pension Benefits
|
|
Other
Postretirement Benefits
|
|
Pension Benefits
|
||||||||||||||||||
September 30,
|
|
September 30,
|
|
September 30,
|
|||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Net actuarial loss (gain)
|
$
|
97
|
|
|
$
|
241
|
|
|
$
|
(4
|
)
|
|
$
|
(5
|
)
|
|
$
|
9
|
|
|
$
|
66
|
|
Prior service credit
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
97
|
|
|
$
|
241
|
|
|
$
|
(4
|
)
|
|
$
|
(7
|
)
|
|
$
|
9
|
|
|
$
|
66
|
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||||||
|
Pension Benefits
|
|
Other
Postretirement
Benefits
|
|
Pension Benefits
|
||||||
|
(in millions)
|
||||||||||
Actuarial loss (gain)
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
Prior service credit
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
U.S. Plans
|
|
Non-U.S. Plans
(1)
|
||||||||||||
September 30,
|
|
September 30,
|
|||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(in millions)
|
||||||||||||||
Accumulated benefit obligation in excess of plan assets
|
|
|
|
|
|
|
|
||||||||
Accumulated benefit obligation—end of year
|
$
|
(7
|
)
|
|
$
|
(16
|
)
|
|
$
|
(5
|
)
|
|
$
|
(474
|
)
|
Fair value of plan assets—end of year
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
415
|
|
Projected benefit obligation in excess of plan assets
|
|
|
|
|
|
|
|
||||||||
Benefit obligation—end of year
|
$
|
(7
|
)
|
|
$
|
(16
|
)
|
|
$
|
(5
|
)
|
|
$
|
(474
|
)
|
Fair value of plan assets—end of year
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
415
|
|
(1)
|
For fiscal 2017, the non-U.S. non-qualified pension plan had benefit obligations in excess of plan assets. For fiscal 2016, both non-U.S. pension plans had benefit obligations in excess of plan assets.
|
|
U.S. Plans
|
|
Non-U.S. Plans
(1)
|
||||||||||||||||||||||||||||
|
Pension Benefits
|
|
Other
Postretirement Benefits
|
|
Pension Benefits
|
||||||||||||||||||||||||||
|
Fiscal
|
||||||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
||||||||||||||||
|
(in millions)
|
||||||||||||||||||||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
13
|
|
|
$
|
47
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
1
|
|
Interest cost
|
36
|
|
|
40
|
|
|
40
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
11
|
|
|
3
|
|
||||||||
Expected return on assets
|
(70
|
)
|
|
(69
|
)
|
|
(72
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|
(4
|
)
|
||||||||
Amortization of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Prior service credit
|
—
|
|
|
(1
|
)
|
|
(7
|
)
|
|
(2
|
)
|
|
(3
|
)
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
||||||||
Actuarial loss (gain)
|
15
|
|
|
7
|
|
|
1
|
|
|
(2
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|
2
|
|
|
—
|
|
||||||||
Net benefit cost
|
$
|
(19
|
)
|
|
$
|
(10
|
)
|
|
$
|
9
|
|
|
$
|
(3
|
)
|
|
$
|
(4
|
)
|
|
$
|
(4
|
)
|
|
$
|
3
|
|
|
$
|
—
|
|
Curtailment gain
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Settlement loss
|
15
|
|
|
13
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total net periodic benefit cost
|
$
|
(4
|
)
|
|
$
|
(5
|
)
|
|
$
|
16
|
|
|
$
|
(3
|
)
|
|
$
|
(4
|
)
|
|
$
|
(4
|
)
|
|
$
|
3
|
|
|
$
|
—
|
|
(1)
|
For fiscal 2016, it represents Visa Europe's UK pension plans' net pension benefit cost recognized from the Closing through September 30, 2016.
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||||||||||||||||||
|
Pension Benefits
|
|
Other Postretirement Benefits
|
|
Pension Benefits
|
||||||||||||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Current year actuarial loss (gain)
|
$
|
(113
|
)
|
|
$
|
30
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
(53
|
)
|
|
$
|
66
|
|
Amortization of actuarial (loss) gain
|
(30
|
)
|
|
(20
|
)
|
|
2
|
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
||||||
Current year prior service credit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service credit
|
—
|
|
|
9
|
|
|
2
|
|
|
3
|
|
|
—
|
|
|
—
|
|
||||||
Total recognized in other comprehensive income
|
$
|
(143
|
)
|
|
$
|
19
|
|
|
$
|
4
|
|
|
$
|
3
|
|
|
$
|
(55
|
)
|
|
$
|
66
|
|
Total recognized in net periodic benefit cost and other comprehensive income
|
$
|
(147
|
)
|
|
$
|
14
|
|
|
$
|
1
|
|
|
$
|
(1
|
)
|
|
$
|
(52
|
)
|
|
$
|
66
|
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
|||||||||||
|
Fiscal
|
|||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|||||
Discount rate for benefit obligation:
(1)
|
|
|
|
|
|
|
|
|
|
|||||
Pension
|
3.84
|
%
|
|
3.62
|
%
|
|
4.33
|
%
|
|
2.70
|
%
|
|
2.40
|
%
|
Postretirement
|
2.44
|
%
|
|
1.91
|
%
|
|
2.43
|
%
|
|
NA
|
|
|
NA
|
|
Discount rate for net periodic benefit cost:
|
|
|
|
|
|
|
|
|
|
|||||
Pension
|
3.62
|
%
|
|
4.33
|
%
|
|
4.27
|
%
|
|
2.40
|
%
|
|
3.10
|
%
|
Postretirement
|
1.91
|
%
|
|
2.43
|
%
|
|
2.59
|
%
|
|
NA
|
|
|
NA
|
|
Expected long-term rate of return on plan assets
(2)
|
7.00
|
%
|
|
7.00
|
%
|
|
7.00
|
%
|
|
4.50
|
%
|
|
3.92
|
%
|
Rate of increase in compensation levels for:
(3)
|
|
|
|
|
|
|
|
|
|
|||||
Benefit obligation
|
NA
|
|
|
NA
|
|
|
4.00
|
%
|
|
3.20
|
%
|
|
3.20
|
%
|
Net periodic benefit cost
|
NA
|
|
|
NA
|
|
|
4.00
|
%
|
|
3.20
|
%
|
|
3.00
|
%
|
(1)
|
Represents a single weighted-average discount rate derived based on a cash flow matching analysis, with the projected benefit payments matching spot rates from a yield curve developed from high-quality corporate bonds.
|
(2)
|
Primarily based on the targeted allocation, and evaluated for reasonableness by considering such factors as: (i) actual return on plan assets; (ii) historical rates of return on various asset classes in the portfolio; (iii) projections of returns on various asset classes; and (iv) current and prospective capital market conditions and economic forecasts.
|
(3)
|
This assumption is not applicable for the U.S. plans in fiscal
2017
and
2016
due to the amendment of the U.S. qualified defined benefit pension plan in October 2015, which discontinued the employer provided credits effective after December 31, 2015.
|
|
U.S. Plans
|
||||||||||||||||||||||||||||||
|
Fair Value Measurements at September 30,
|
||||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||
|
(in millions)
|
||||||||||||||||||||||||||||||
Cash equivalents
|
$
|
31
|
|
|
$
|
39
|
|
|
|
|
|
|
|
|
|
|
$
|
31
|
|
|
$
|
39
|
|
||||||||
Collective investment funds
|
|
|
|
|
$
|
540
|
|
|
$
|
—
|
|
|
|
|
|
|
540
|
|
|
—
|
|
||||||||||
Corporate debt securities
|
|
|
|
|
197
|
|
|
185
|
|
|
|
|
|
|
197
|
|
|
185
|
|
||||||||||||
U.S. government-sponsored debt securities
|
|
|
|
|
47
|
|
|
30
|
|
|
|
|
|
|
47
|
|
|
30
|
|
||||||||||||
U.S. Treasury securities
|
75
|
|
|
100
|
|
|
|
|
|
|
|
|
|
|
75
|
|
|
100
|
|
||||||||||||
Asset-backed securities
|
|
|
|
|
|
|
|
|
$
|
39
|
|
|
$
|
51
|
|
|
39
|
|
|
51
|
|
||||||||||
Equity securities
|
145
|
|
|
672
|
|
|
|
|
|
|
|
|
|
|
145
|
|
|
672
|
|
||||||||||||
Total
|
$
|
251
|
|
|
$
|
811
|
|
|
$
|
784
|
|
|
$
|
215
|
|
|
$
|
39
|
|
|
$
|
51
|
|
|
$
|
1,074
|
|
|
$
|
1,077
|
|
|
Non-U.S. Plans
|
||||||||||||||||||||||||||||||
|
Fair Value Measurements at September 30,
|
||||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||
|
(in millions)
|
||||||||||||||||||||||||||||||
Cash equivalents
|
$
|
1
|
|
|
$
|
105
|
|
|
|
|
|
|
|
|
|
|
$
|
1
|
|
|
$
|
105
|
|
||||||||
Corporate debt securities
|
|
|
|
|
$
|
39
|
|
|
$
|
39
|
|
|
|
|
|
|
39
|
|
|
39
|
|
||||||||||
UK Treasury securities
|
150
|
|
|
52
|
|
|
|
|
|
|
|
|
|
|
150
|
|
|
52
|
|
||||||||||||
Asset-backed securities
|
|
|
|
|
|
|
|
|
$
|
32
|
|
|
$
|
29
|
|
|
32
|
|
|
29
|
|
||||||||||
Equity securities
|
134
|
|
|
116
|
|
|
|
|
|
|
|
|
|
|
134
|
|
|
116
|
|
||||||||||||
Multi-asset securities
(1)
|
|
|
|
|
77
|
|
|
74
|
|
|
|
|
|
|
77
|
|
|
74
|
|
||||||||||||
Total
|
$
|
285
|
|
|
$
|
273
|
|
|
$
|
116
|
|
|
$
|
113
|
|
|
$
|
32
|
|
|
$
|
29
|
|
|
$
|
433
|
|
|
$
|
415
|
|
(1)
|
Multi-asset securities represent pension plan assets that are invested in funds comprised of broad ranges of assets.
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||||||
|
Pension
Benefits
|
|
Other
Postretirement
Benefits
|
|
Pension Benefits
|
||||||
Actual employer contributions
|
(in millions)
|
||||||||||
2017
|
$
|
9
|
|
|
$
|
3
|
|
|
$
|
5
|
|
2016
|
$
|
1
|
|
|
$
|
3
|
|
|
$
|
102
|
|
Expected employer contributions
|
|
|
|
|
|
||||||
2018
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
5
|
|
Expected benefit payments
|
|
|
|
|
|
||||||
2018
|
$
|
161
|
|
|
$
|
2
|
|
|
$
|
5
|
|
2019
|
$
|
83
|
|
|
$
|
2
|
|
|
$
|
5
|
|
2020
|
$
|
82
|
|
|
$
|
2
|
|
|
$
|
5
|
|
2021
|
$
|
80
|
|
|
$
|
1
|
|
|
$
|
5
|
|
2022
|
$
|
75
|
|
|
$
|
1
|
|
|
$
|
5
|
|
2023-2027
|
$
|
323
|
|
|
$
|
1
|
|
|
$
|
29
|
|
|
September 30,
2017 |
|
September 30,
2016 |
||||
|
(in millions)
|
||||||
Cash equivalents
(1)
|
$
|
1,490
|
|
|
$
|
1,295
|
|
Pledged securities at market value
|
167
|
|
|
170
|
|
||
Letters of credit
|
1,316
|
|
|
1,311
|
|
||
Guarantees
|
941
|
|
|
1,418
|
|
||
Total
|
$
|
3,914
|
|
|
$
|
4,194
|
|
(1)
|
Cash collateral held by Visa Europe is not included on the Company's consolidated balance sheet as its clients retain beneficial ownership and the cash is only accessible to the Company in the event of default by the client on its settlement obligations.
|
|
September 30,
2017 |
|
September 30,
2016 |
||||
|
(in millions)
|
||||||
United States
|
$
|
2,003
|
|
|
$
|
1,827
|
|
International
|
250
|
|
|
323
|
|
||
Total
|
$
|
2,253
|
|
|
$
|
2,150
|
|
(in millions, except conversion rate)
|
Shares
Outstanding
|
|
Conversion Rate Into Class A Common Stock
|
|
As-converted Class A Common Stock
(1)
|
|||
UK&I preferred stock
|
2
|
|
|
13.0770
|
|
|
32
|
|
Europe preferred stock
|
3
|
|
|
13.9480
|
|
|
44
|
|
Class A common stock
(2)
|
1,818
|
|
|
—
|
|
|
1,818
|
|
Class B common stock
|
245
|
|
|
1.6483
|
|
(3)
|
405
|
|
Class C common stock
|
13
|
|
|
4.0000
|
|
|
51
|
|
Total
|
|
|
|
|
2,350
|
|
(1)
|
Figures in the table may not recalculate exactly due to rounding. As-converted class A common stock is calculated based on unrounded numbers.
|
(2)
|
Class A common stock shares outstanding reflect repurchases settled on or before
September 30, 2017
.
|
(3)
|
The class B to class A common stock conversion rate is presented on a rounded basis. Conversion calculations for dividend payments are based on a conversion rate rounded to the tenth decimal.
|
(in millions, except per share data)
|
2017
|
|
2016
|
||||||
Shares repurchased in the open market
(2)
|
77
|
|
|
91
|
|
||||
Average repurchase price per share
(3)
|
$
|
89.98
|
|
|
$
|
77.05
|
|
||
Total cost
|
$
|
6,891
|
|
|
$
|
6,987
|
|
(1)
|
Shares repurchased in the open market reflect repurchases settled during fiscal
2017
. These amounts include repurchases traded but not yet settled on or before September 30, 2016 for fiscal
2017
or September 30, 2015 for fiscal
2016
and exclude repurchases traded but not yet settled on or before September 30, 2017 for fiscal
2017
or September 30, 2016 for fiscal
2016
.
|
(2)
|
All shares repurchased in the open market have been retired and constitute authorized but unissued shares.
|
(3)
|
Figures in the table may not recalculate exactly due to rounding. Average repurchase price per share is calculated based on unrounded numbers.
|
|
UK&I Preferred Stock
|
|
Europe Preferred Stock
|
|||||
(in millions, except per share and conversion rate data)
|
2017
|
|
2017
|
|||||
Reduction in equivalent number of shares of class A common stock
|
2
|
|
|
—
|
|
(1)
|
||
Effective price per share
(2)
|
$
|
88.70
|
|
|
$
|
85.01
|
|
|
Recovery through conversion rate adjustment
|
$
|
190
|
|
|
$
|
1
|
|
|
(1)
|
The reduction in equivalent number of shares of class A common stock was less than one million shares.
|
(2)
|
Effective price per share is calculated using the volume-weighted average price of the Company's class A common stock over a pricing period in accordance with the Company's current certificates of designations for its series B and C convertible participating preferred stock.
|
|
Basic Earnings Per Share
|
|
|
Diluted Earnings Per Share
|
||||||||||||||||||
|
(in millions, except per share data)
|
|||||||||||||||||||||
|
Income
Allocation
(A)
(2)
|
|
Weighted-
Average
Shares
Outstanding (B)
|
|
Earnings per
Share =
(A)/(B)
|
|
|
Income
Allocation
(A)
(2)
|
|
Weighted-
Average
Shares
Outstanding (B)
|
|
Earnings per
Share =
(A)/(B)
|
||||||||||
Class A common stock
|
$
|
5,170
|
|
|
1,845
|
|
|
$
|
2.80
|
|
|
|
$
|
6,699
|
|
|
2,395
|
|
(3)
|
$
|
2.80
|
|
Class B common stock
|
1,134
|
|
|
245
|
|
|
$
|
4.62
|
|
|
|
$
|
1,132
|
|
|
245
|
|
|
$
|
4.61
|
|
|
Class C common stock
|
163
|
|
|
14
|
|
|
$
|
11.21
|
|
|
|
$
|
162
|
|
|
14
|
|
|
$
|
11.19
|
|
|
Participating securities
(4)
|
232
|
|
|
Not presented
|
|
|
Not presented
|
|
|
|
$
|
232
|
|
|
Not presented
|
|
|
Not presented
|
|
|||
Net income
|
$
|
6,699
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per Share
|
|
|
Diluted Earnings Per Share
|
||||||||||||||||||
|
(in millions, except per share data)
|
|||||||||||||||||||||
|
Income
Allocation
(A)
(2)
|
|
Weighted-
Average
Shares
Outstanding (B)
|
|
Earnings per
Share =
(A)/(B)
|
|
|
Income
Allocation
(A)
(2)
|
|
Weighted-
Average
Shares
Outstanding (B)
|
|
Earnings per
Share =
(A)/(B)
|
||||||||||
Class A common stock
|
$
|
4,738
|
|
|
1,906
|
|
|
$
|
2.49
|
|
|
|
$
|
5,991
|
|
|
2,414
|
|
(3)
|
$
|
2.48
|
|
Class B common stock
|
1,006
|
|
|
245
|
|
|
$
|
4.10
|
|
|
|
$
|
1,004
|
|
|
245
|
|
|
$
|
4.09
|
|
|
Class C common stock
|
185
|
|
|
19
|
|
|
$
|
9.94
|
|
|
|
$
|
185
|
|
|
19
|
|
|
$
|
9.93
|
|
|
Participating securities
(4)
|
62
|
|
|
Not presented
|
|
|
Not presented
|
|
|
|
$
|
61
|
|
|
Not presented
|
|
|
Not presented
|
|
|||
Net income
|
$
|
5,991
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per Share
|
|
|
Diluted Earnings Per Share
|
||||||||||||||||||
|
(in millions, except per share data)
|
|||||||||||||||||||||
|
Income
Allocation
(A)
(2)
|
|
Weighted-
Average
Shares
Outstanding (B)
|
|
Earnings per
Share =
(A)/(B)
|
|
|
Income
Allocation
(A)
(2)
|
|
Weighted-
Average
Shares
Outstanding (B)
|
|
Earnings per
Share =
(A)/(B)
|
||||||||||
Class A common stock
|
$
|
5,044
|
|
|
1,954
|
|
|
$
|
2.58
|
|
|
|
$
|
6,328
|
|
|
2,457
|
|
(3)
|
$
|
2.58
|
|
Class B common stock
|
1,045
|
|
|
245
|
|
|
$
|
4.26
|
|
|
|
$
|
1,042
|
|
|
245
|
|
|
$
|
4.25
|
|
|
Class C common stock
|
224
|
|
|
22
|
|
|
$
|
10.33
|
|
|
|
$
|
223
|
|
|
22
|
|
|
$
|
10.30
|
|
|
Participating securities
(4)
|
15
|
|
|
Not presented
|
|
|
Not presented
|
|
|
|
$
|
15
|
|
|
Not presented
|
|
|
Not presented
|
|
|||
Net income
|
$
|
6,328
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Figures in the table may not recalculate exactly due to rounding. Earnings per share is calculated based on unrounded numbers. The number of shares and per share amounts for the prior periods presented have been retroactively adjusted to reflect the
four
-for-one stock split effected in the second quarter of fiscal 2015. See
Note 13—Stockholders' Equity
.
|
(2)
|
Net income is allocated based on proportional ownership on an as-converted basis. The weighted-average number of shares of as-converted class B common stock used in the income allocation was
405 million
for fiscal
2017
,
2016
and
2015
. The weighted-average number of shares of as-converted class C common stock used in the income allocation was
58 million
,
75 million
and
87 million
for fiscal
2017
,
2016
and
2015
, respectively. The weighted-average number of shares of preferred stock, included within participating securities, was
33 million
of as-converted UK&I preferred stock, and
44 million
of as-converted Europe preferred stock for fiscal
2017
.
|
(3)
|
Weighted-average diluted shares outstanding are calculated on an as-converted basis, and include incremental common stock equivalents, as calculated under the treasury stock method. The computation includes
5 million
common stock equivalents for fiscal
2017
and
2016
and
6 million
common stock equivalents for fiscal
2015
, because their effect would have been dilutive. The computation excludes
2 million
of common stock equivalents for fiscal
2017
,
2016
and
2015
, because their effect would have been anti-dilutive.
|
(4)
|
Participating securities include preferred stock outstanding and unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents, such as the Company's UK&I and Europe preferred stock, restricted stock awards, restricted stock units and earned performance-based shares. UK&I and Europe preferred stock were issued as part of the purchase price consideration in connection
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Expected term (in years)
(1)
|
|
4.23
|
|
|
4.35
|
|
|
4.55
|
|
|||
Risk-free rate of return
(2)
|
|
1.6
|
%
|
|
1.5
|
%
|
|
1.5
|
%
|
|||
Expected volatility
(3)
|
|
20.2
|
%
|
|
21.7
|
%
|
|
22.0
|
%
|
|||
Expected dividend yield
(4)
|
|
0.8
|
%
|
|
0.7
|
%
|
|
0.8
|
%
|
|||
Fair value per option granted
|
|
$
|
13.90
|
|
|
$
|
15.01
|
|
|
$
|
12.04
|
|
(1)
|
This assumption is based on the Company's historical option exercises and those of a set of peer companies that management believes is generally comparable to Visa. The Company's data is weighted based on the number of years between the measurement date and Visa's initial public offering as a percentage of the options' contractual term. The relative weighting placed on Visa's data and peer data in fiscal
2017
was approximately
87%
and
13%
, respectively, and
77%
and
23%
in fiscal
2016
, respectively and
67%
and
33%
in fiscal
2015
, respectively.
|
(2)
|
Based upon the zero coupon U.S. treasury bond rate over the expected term of the awards.
|
(3)
|
Based on the Company’s implied and historical volatility. The expected volatility was
20%
in fiscal 2017 and ranged from
20%
to
23%
in fiscal 2016 and
21%
to
23%
in fiscal 2015.
|
(4)
|
Based on the Company’s annual dividend rate on the date of grant.
|
|
Options
|
|
Weighted-
Average
Exercise Price
Per Share
|
|
Weighted-
Average
Remaining
Contractual
Term
(in years)
|
|
Aggregate
Intrinsic
Value
(1)
(in millions)
|
|||
Outstanding at October 1, 2016
|
8,876,484
|
|
|
$
|
38.42
|
|
|
|
|
|
Granted
|
1,671,344
|
|
|
$
|
80.82
|
|
|
|
|
|
Forfeited
|
(386,136
|
)
|
|
$
|
75.01
|
|
|
|
|
|
Exercised
|
(3,045,816
|
)
|
|
$
|
29.62
|
|
|
|
|
|
Outstanding at September 30, 2017
|
7,115,876
|
|
|
$
|
50.17
|
|
|
5.4
|
|
$392
|
Options exercisable at September 30, 2017
|
4,463,008
|
|
|
$
|
33.39
|
|
|
3.6
|
|
$321
|
Options exercisable and expected to vest at September 30, 2017
(2)
|
6,773,571
|
|
|
$
|
48.73
|
|
|
5.3
|
|
$383
|
(1)
|
Calculated using the closing stock price on the last trading day of fiscal
2017
of
$105.24
, less the option exercise price, multiplied by the number of instruments.
|
(2)
|
Applies a forfeiture rate to unvested options outstanding at September 30,
2017
to estimate the options expected to vest in the future.
|
|
Restricted Stock
|
|
Weighted-
Average
Grant Date
Fair Value
|
|
Weighted-
Average
Remaining
Contractual
Term
(in years)
|
|
Aggregate
Intrinsic
Value
(1)
(in millions)
|
||||||||||||||
|
Awards
|
|
Units
|
|
RSA
|
|
RSU
|
|
RSA
|
|
RSU
|
|
RSA
|
|
RSU
|
||||||
Outstanding at October 1, 2016
|
1,766,582
|
|
|
3,146,954
|
|
|
$
|
59.26
|
|
|
$
|
75.48
|
|
|
|
|
|
|
|
|
|
Granted
|
—
|
|
|
3,268,327
|
|
|
$
|
—
|
|
|
$
|
81.67
|
|
|
|
|
|
|
|
|
|
Vested
|
(1,210,176
|
)
|
|
(1,299,187
|
)
|
|
$
|
57.37
|
|
|
$
|
72.20
|
|
|
|
|
|
|
|
|
|
Forfeited
|
(90,399
|
)
|
|
(442,393
|
)
|
|
$
|
61.90
|
|
|
$
|
79.34
|
|
|
|
|
|
|
|
|
|
Outstanding at September 30, 2017
|
466,007
|
|
|
4,673,701
|
|
|
$
|
63.37
|
|
|
$
|
80.37
|
|
|
0.2
|
|
1.6
|
|
$49
|
|
$492
|
(1)
|
Calculated by multiplying the closing stock price on the last trading day of fiscal
2017
of
$105.24
by the number of instruments.
|
|
Shares
|
|
Weighted-
Average
Grant Date
Fair Value
|
|
Weighted-
Average
Remaining
Contractual
Term
(in years)
|
|
Aggregate
Intrinsic
Value
(1)
(in millions)
|
|||
Outstanding at October 1, 2016
|
1,042,012
|
|
|
$
|
78.24
|
|
|
|
|
|
Granted
(2)
|
634,651
|
|
|
$
|
86.37
|
|
|
|
|
|
Vested and earned
|
(345,797
|
)
|
|
$
|
72.50
|
|
|
|
|
|
Unearned
|
(97,531
|
)
|
|
$
|
72.50
|
|
|
|
|
|
Forfeited
|
(295,660
|
)
|
|
$
|
85.13
|
|
|
|
|
|
Outstanding at September 30, 2017
|
937,675
|
|
|
$
|
84.20
|
|
|
1.0
|
|
$98
|
(1)
|
Calculated by multiplying the closing stock price on the last trading day of
fiscal 2017
of
$105.24
by the number of instruments.
|
(2)
|
Represents the maximum number of performance-based shares which could be earned.
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|
Total
|
||||||||||||||
|
(in millions)
|
||||||||||||||||||||||||||
Operating leases
|
$
|
155
|
|
|
$
|
119
|
|
|
$
|
68
|
|
|
$
|
64
|
|
|
$
|
57
|
|
|
$
|
163
|
|
|
$
|
626
|
|
Marketing and sponsorships
|
124
|
|
|
123
|
|
|
112
|
|
|
40
|
|
|
33
|
|
|
—
|
|
|
432
|
|
|||||||
Total
|
$
|
279
|
|
|
$
|
242
|
|
|
$
|
180
|
|
|
$
|
104
|
|
|
$
|
90
|
|
|
$
|
163
|
|
|
$
|
1,058
|
|
(in millions)
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|
Total
|
||||||||||||||
Client incentives
|
$
|
5,049
|
|
|
$
|
4,654
|
|
|
$
|
4,117
|
|
|
$
|
3,658
|
|
|
$
|
3,102
|
|
|
$
|
5,080
|
|
|
$
|
25,660
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in millions)
|
||||||||||
U.S.
|
$
|
8,440
|
|
|
$
|
5,839
|
|
|
$
|
7,214
|
|
Non-U.S.
|
3,254
|
|
|
2,173
|
|
|
1,781
|
|
|||
Total income before taxes
|
$
|
11,694
|
|
|
$
|
8,012
|
|
|
$
|
8,995
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in millions)
|
||||||||||
Current:
|
|
|
|
|
|
||||||
U.S. federal
|
$
|
2,377
|
|
|
$
|
2,250
|
|
|
$
|
1,991
|
|
State and local
|
291
|
|
|
181
|
|
|
168
|
|
|||
Non-U.S.
|
629
|
|
|
368
|
|
|
300
|
|
|||
Total current taxes
|
3,297
|
|
|
2,799
|
|
|
2,459
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
U.S. federal
|
1,607
|
|
|
(508
|
)
|
|
181
|
|
|||
State and local
|
66
|
|
|
(63
|
)
|
|
1
|
|
|||
Non-U.S.
|
25
|
|
|
(207
|
)
|
|
26
|
|
|||
Total deferred taxes
|
1,698
|
|
|
(778
|
)
|
|
208
|
|
|||
Total income tax provision
|
$
|
4,995
|
|
|
$
|
2,021
|
|
|
$
|
2,667
|
|
|
2017
|
|
2016
|
||||
|
(in millions)
|
||||||
Deferred Tax Assets:
|
|
|
|
||||
Accrued compensation and benefits
|
$
|
194
|
|
|
$
|
277
|
|
Comprehensive loss
|
29
|
|
|
106
|
|
||
Accrued litigation obligation
|
373
|
|
|
373
|
|
||
Client incentives
|
272
|
|
|
266
|
|
||
Net operating loss carryforwards
|
45
|
|
|
32
|
|
||
Federal benefit of state taxes
|
236
|
|
|
195
|
|
||
Federal benefit of foreign taxes
|
—
|
|
|
1,214
|
|
||
Other
|
193
|
|
|
280
|
|
||
Valuation allowance
|
(35
|
)
|
|
(31
|
)
|
||
Deferred tax assets
|
1,307
|
|
|
2,712
|
|
||
Deferred Tax Liabilities:
|
|
|
|
||||
Property, equipment and technology, net
|
(391
|
)
|
|
(278
|
)
|
||
Intangible assets
|
(6,756
|
)
|
|
(7,013
|
)
|
||
Foreign taxes
|
(59
|
)
|
|
(106
|
)
|
||
Other
|
—
|
|
|
(101
|
)
|
||
Deferred tax liabilities
|
(7,206
|
)
|
|
(7,498
|
)
|
||
Net deferred tax liabilities
|
$
|
(5,899
|
)
|
|
$
|
(4,786
|
)
|
|
For the Years Ended September 30,
|
|||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
|
Dollars
|
|
Percent
|
|
Dollars
|
|
Percent
|
|
Dollars
|
|
Percent
|
|||||||||
|
(in millions, except percentages)
|
|||||||||||||||||||
U.S. federal income tax at statutory rate
|
$
|
4,093
|
|
|
35
|
%
|
|
$
|
2,804
|
|
|
35
|
%
|
|
$
|
3,148
|
|
|
35
|
%
|
State income taxes, net of federal benefit
|
200
|
|
|
2
|
%
|
|
135
|
|
|
2
|
%
|
|
194
|
|
|
2
|
%
|
|||
Non-U.S. tax effect, net of federal benefit
|
(641
|
)
|
|
(5
|
)%
|
|
(553
|
)
|
|
(7
|
)%
|
|
(327
|
)
|
|
(4
|
)%
|
|||
Reorganization of Visa Europe and other legal entities
|
1,515
|
|
|
13
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||
Remeasurement of deferred tax liability
|
—
|
|
|
—
|
%
|
|
(88
|
)
|
|
(1
|
)%
|
|
—
|
|
|
—
|
%
|
|||
Reversal of prior years tax reserves related to the resolution of uncertain tax positions
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
(239
|
)
|
|
(2
|
)%
|
|||
Revaluation of Visa Europe put option
|
—
|
|
|
—
|
%
|
|
(89
|
)
|
|
(1
|
)%
|
|
—
|
|
|
—
|
%
|
|||
Other, net
|
(172
|
)
|
|
(2
|
)%
|
|
(188
|
)
|
|
(3
|
)%
|
|
(109
|
)
|
|
(1
|
)%
|
|||
Income tax provision
|
$
|
4,995
|
|
|
43
|
%
|
|
$
|
2,021
|
|
|
25
|
%
|
|
$
|
2,667
|
|
|
30
|
%
|
•
|
the aforementioned
$1.5 billion
non-recurring, non-cash income tax provision related to the legal entity reorganization recorded in fiscal 2017;
|
•
|
$71 million
tax benefit related to Visa Foundation's receipt of Visa Inc. shares mentioned above, recorded in fiscal 2017;
|
•
|
$70 million
of excess tax benefits related to share-based payments recorded in fiscal 2017, as a result of the early adoption of Accounting Standards Update 2016-09. See
Note 1—Summary of Significant Accounting Policies
; and
|
•
|
the absence of:
|
▪
|
the effect of one-time items related to the Visa Europe acquisition recorded during fiscal 2016, the most significant of which was the
$1.9 billion
U.S. loss related to the effective settlement of the Framework Agreement between Visa and Visa Europe. These one-time items impacted the geographic mix of global income, resulting in a reduced effective tax rate in fiscal 2016;
|
▪
|
an
$88 million
one-time tax benefit due to the remeasurement of deferred tax liabilities as a result of the reduction in the UK tax rate enacted in fiscal 2016; and
|
▪
|
the non-taxable
$255 million
revaluation of the Visa Europe put option recorded in fiscal 2016.
|
•
|
the effect of one-time items related to the Visa Europe acquisition, as mentioned above, that impacted the geographic mix of global income resulting in a reduced effective tax rate in fiscal 2016;
|
•
|
an
$88 million
one-time tax benefit due to the remeasurement of deferred tax liabilities as a result of the reduction in the UK tax rate enacted in fiscal 2016;
|
•
|
the non-taxable
$255 million
revaluation of the Visa Europe put option recorded in fiscal 2016; and
|
•
|
the absence of a
$296 million
tax benefit recognized in fiscal 2015 resulting from the resolution of uncertain tax positions with taxing authorities. Included in the
$296 million
was a one-time
$239 million
tax benefit that related to prior fiscal years.
|
|
2017
|
|
2016
|
||||
|
(in millions)
|
||||||
Beginning balance at October 1
|
$
|
1,160
|
|
|
$
|
1,051
|
|
Increases of unrecognized tax benefits related to prior years
|
56
|
|
|
153
|
|
||
Decreases of unrecognized tax benefits related to prior years
|
(59
|
)
|
|
(180
|
)
|
||
Increases of unrecognized tax benefits related to current year
|
197
|
|
|
138
|
|
||
Reductions related to lapsing statute of limitations
|
(1
|
)
|
|
(2
|
)
|
||
Ending balance at September 30
|
$
|
1,353
|
|
|
$
|
1,160
|
|
|
Fiscal 2017
|
|
Fiscal 2016
|
||||
|
(in millions)
|
||||||
Balance at October 1
|
$
|
981
|
|
|
$
|
1,024
|
|
Provision for uncovered legal matters
|
19
|
|
|
2
|
|
||
Accrual for VE territory covered litigation
|
186
|
|
|
2
|
|
||
Payments on legal matters
|
(204
|
)
|
|
(47
|
)
|
||
Balance at September 30
|
$
|
982
|
|
|
$
|
981
|
|
|
Fiscal 2017
|
|
Fiscal 2016
|
||||
|
(in millions)
|
||||||
Balance at October 1
|
$
|
978
|
|
|
$
|
1,023
|
|
Payments on U.S. covered litigation
|
—
|
|
|
(45
|
)
|
||
Balance at September 30
|
$
|
978
|
|
|
$
|
978
|
|
|
Fiscal 2017
|
|
Fiscal 2016
|
||||
|
(in millions)
|
||||||
Balance at October 1
|
$
|
2
|
|
|
$
|
—
|
|
Accrual for VE territory covered litigation
|
186
|
|
|
2
|
|
||
Payments on VE territory covered litigation
|
(187
|
)
|
|
—
|
|
||
Balance at September 30
|
$
|
1
|
|
|
$
|
2
|
|
|
Quarter Ended (unaudited)
|
|
Fiscal Year
|
||||||||||||||||
Visa Inc.
|
September 30,
2017 |
|
June 30,
2017 |
|
March 31,
2017 (1) |
|
December 31,
2016 |
|
2017 Total
|
||||||||||
|
(in millions, except per share data)
|
||||||||||||||||||
Operating revenues
|
$
|
4,855
|
|
|
$
|
4,565
|
|
|
$
|
4,477
|
|
|
$
|
4,461
|
|
|
$
|
18,358
|
|
Operating income
|
$
|
3,212
|
|
|
$
|
3,024
|
|
|
$
|
2,808
|
|
|
$
|
3,100
|
|
|
$
|
12,144
|
|
Net income
|
$
|
2,140
|
|
|
$
|
2,059
|
|
|
$
|
430
|
|
|
$
|
2,070
|
|
|
$
|
6,699
|
|
Basic earnings per share
|
|
|
|
|
|
|
|
|
|
||||||||||
Class A common stock
|
$
|
0.91
|
|
|
$
|
0.87
|
|
|
$
|
0.18
|
|
|
$
|
0.86
|
|
|
$
|
2.80
|
|
Class B common stock
|
$
|
1.49
|
|
|
$
|
1.43
|
|
|
$
|
0.30
|
|
|
$
|
1.41
|
|
|
$
|
4.62
|
|
Class C common stock
|
$
|
3.62
|
|
|
$
|
3.46
|
|
|
$
|
0.72
|
|
|
$
|
3.43
|
|
|
$
|
11.21
|
|
Diluted earnings per share
|
|
|
|
|
|
|
|
|
|
||||||||||
Class A common stock
|
$
|
0.90
|
|
|
$
|
0.86
|
|
|
$
|
0.18
|
|
|
$
|
0.86
|
|
|
$
|
2.80
|
|
Class B common stock
|
$
|
1.49
|
|
|
$
|
1.42
|
|
|
$
|
0.29
|
|
|
$
|
1.41
|
|
|
$
|
4.61
|
|
Class C common stock
|
$
|
3.61
|
|
|
$
|
3.45
|
|
|
$
|
0.72
|
|
|
$
|
3.42
|
|
|
$
|
11.19
|
|
|
Quarter Ended (unaudited)
|
|
Fiscal Year
|
||||||||||||||||
Visa Inc.
|
September 30,
2016 (1) |
|
June 30,
2016 (1),(2) |
|
March 31,
2016 (1) |
|
December 31,
2015 (1) |
|
2016 Total
|
||||||||||
|
(in millions, except per share data)
|
||||||||||||||||||
Operating revenues
|
$
|
4,261
|
|
|
$
|
3,630
|
|
|
$
|
3,626
|
|
|
$
|
3,565
|
|
|
$
|
15,082
|
|
Operating income
|
$
|
2,625
|
|
|
$
|
428
|
|
|
$
|
2,434
|
|
|
$
|
2,396
|
|
|
$
|
7,883
|
|
Net income
|
$
|
1,931
|
|
|
$
|
412
|
|
|
$
|
1,707
|
|
|
$
|
1,941
|
|
|
$
|
5,991
|
|
Basic earnings per share
|
|
|
|
|
|
|
|
|
|
||||||||||
Class A common stock
|
$
|
0.79
|
|
|
$
|
0.17
|
|
|
$
|
0.71
|
|
|
$
|
0.80
|
|
|
$
|
2.49
|
|
Class B common stock
|
$
|
1.31
|
|
|
$
|
0.29
|
|
|
$
|
1.17
|
|
|
$
|
1.32
|
|
|
$
|
4.10
|
|
Class C common stock
|
$
|
3.17
|
|
|
$
|
0.69
|
|
|
$
|
2.85
|
|
|
$
|
3.20
|
|
|
$
|
9.94
|
|
Diluted earnings per share
|
|
|
|
|
|
|
|
|
|
||||||||||
Class A common stock
|
$
|
0.79
|
|
|
$
|
0.17
|
|
|
$
|
0.71
|
|
|
$
|
0.80
|
|
|
$
|
2.48
|
|
Class B common stock
|
$
|
1.30
|
|
|
$
|
0.28
|
|
|
$
|
1.17
|
|
|
$
|
1.32
|
|
|
$
|
4.09
|
|
Class C common stock
|
$
|
3.16
|
|
|
$
|
0.69
|
|
|
$
|
2.84
|
|
|
$
|
3.20
|
|
|
$
|
9.93
|
|
(1)
|
The Company's unaudited consolidated statement of operations include the impact of several significant one-time items. See
Overview
within
Item 7—Management's Discussion and Analysis of Financial Condition and Results of Operations
of this report.
|
(2)
|
The Company did not include Visa Europe's financial results in the Company's unaudited consolidated financial 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. See
Note 2—Visa Europe
and
Note 14—Earnings Per Share
to the consolidated financial statements included in
Item 8—Financial Statements and Supplementary Data
of this report.
|
ITEM 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosures
|
ITEM 9A.
|
Controls and Procedures
|
ITEM 9B.
|
Other Information
|
ITEM 10.
|
Directors, Executive Officers and Corporate Governance
|
ITEM 11.
|
Executive Compensation
|
ITEM 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
ITEM 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
ITEM 14.
|
Principal Accountant Fees and Services
|
ITEM 15.
|
Exhibits and Financial Statement Schedules
|
1.
|
Consolidated Financial Statements
|
2.
|
Consolidated Financial Statement Schedules
|
3.
|
The following exhibits are filed as part of this report or, where indicated, were previously filed and are hereby incorporated by reference:
|
VISA INC.
|
|
|
|
|
|
By:
|
|
/s/ Alfred F. Kelly,Jr.
|
Name:
|
|
Alfred F. Kelly, Jr.
|
Title:
|
|
Chief Executive Officer
|
Date:
|
|
November 16, 2017
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Alfred F. Kelly, Jr.
|
|
Chief Executive Officer and Director
|
|
November 16, 2017
|
Alfred F. Kelly, Jr.
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Vasant M. Prabhu
|
|
Chief Financial Officer
|
|
November 16, 2017
|
Vasant M. Prabhu
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
/s/ James H. Hoffmeister
|
|
Global Corporate Controller and
|
|
November 16, 2017
|
James H. Hoffmeister
|
|
Chief Accounting Officer
|
|
|
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Robert W. Matschullat
|
|
Independent Chair
|
|
November 16, 2017
|
Robert W. Matschullat
|
|
|
|
|
|
|
|
|
|
/s/ Lloyd A. Carney
|
|
Director
|
|
November 16, 2017
|
Lloyd A. Carney
|
|
|
|
|
|
|
|
|
|
/s/ Mary B. Cranston
|
|
Director
|
|
November 16, 2017
|
Mary B. Cranston
|
|
|
|
|
|
|
|
|
|
/s/ Francisco Javier Fernández-Carbajal
|
|
Director
|
|
November 16, 2017
|
Francisco Javier Fernández-Carbajal
|
|
|
|
|
|
|
|
|
|
/s/ Gary A. Hoffman
|
|
Director
|
|
November 16, 2017
|
Gary A. Hoffman
|
|
|
|
|
|
|
|
|
|
/s/ John F. Lundgren
|
|
Director
|
|
November 16, 2017
|
John F. Lundgren
|
|
|
|
|
|
|
|
|
|
/s/ Suzanne Nora Johnson
|
|
Director
|
|
November 16, 2017
|
Suzanne Nora Johnson
|
|
|
|
|
|
|
|
|
|
/s/ John A. C. Swainson
|
|
Director
|
|
November 16, 2017
|
John A. C. Swainson
|
|
|
|
|
|
|
|
|
|
/s/ Maynard G. Webb, Jr.
|
|
Director
|
|
November 16, 2017
|
Maynard G. Webb, Jr.
|
|
|
|
|
|
|
|
|
Incorporated by Reference
|
||||||
Exhibit
|
|
Exhibit
|
|
|
|
File
|
|
Exhibit
|
|
Filing
|
Number
|
|
Description
|
|
Form
|
|
Number
|
|
Number
|
|
Date
|
|
|
|
|
|
|
|
|
|
|
|
2.1
|
|
Amended and Restated Transaction Agreement, dated as of May 10, 2016, between Visa Inc. and Visa Europe Limited #
|
|
8-K
|
|
001-33977
|
|
|
5/10/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
3.1
|
|
Sixth Amended and Restated Certificate of Incorporation of Visa Inc.
|
|
8-K
|
|
001-33977
|
|
|
1/29/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
3.2
|
|
Certificate of Correction of the Certificate of Incorporation of Visa Inc.
|
|
8-K
|
|
001-33977
|
|
|
2/27/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
3.3
|
|
Amended and Restated Bylaws of Visa Inc.
|
|
10-K
|
|
001-33977
|
|
|
11/20/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
4.1
|
|
Form of stock certificate of Visa Inc.
|
|
S-4/A
|
|
333-143966
|
|
|
9/13/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
4.2
|
|
Form of specimen certificate for class B common stock of Visa Inc.
|
|
8-A
|
|
000-53572
|
|
|
1/28/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
4.3
|
|
Form of specimen certificate for class C common stock of Visa Inc.
|
|
8-A
|
|
000-53572
|
|
|
1/28/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
4.5
|
|
Indenture dated December 14, 2015 between Visa Inc. and U.S. Bank National Association
|
|
8-K
|
|
001-33977
|
|
|
12/14/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
4.6
|
|
Form of 2.200% Senior Note due 2020
|
|
8-K
|
|
001-33977
|
|
|
12/14/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
4.7
|
|
Form of 2.150% Senior Note due 2022
|
|
8-K
|
|
001-33977
|
|
|
9/11/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
4.8
|
|
Form of 2.800% Senior Note due 2022
|
|
8-K
|
|
001-33977
|
|
|
12/14/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
4.9
|
|
Form of 3.150% Senior Note due 2025
|
|
8-K
|
|
001-33977
|
|
|
12/14/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
4.1
|
|
Form of 2.750% Senior Note due 2027
|
|
8-K
|
|
001-33977
|
|
|
9/11/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
4.11
|
|
Form of 4.150% Senior Note due 2035
|
|
8-K
|
|
001-33977
|
|
|
12/14/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
4.12
|
|
Form of 4.300% Senior Note due 2045
|
|
8-K
|
|
001-33977
|
|
|
12/14/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
4.13
|
|
Form of 3.650% Senior Note due 2047
|
|
8-K
|
|
001-33977
|
|
|
9/11/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
4.14
|
|
Certificate of Designations of Series A Convertible Participating Preferred Stock of Visa Inc.
|
|
8-K
|
|
001-33977
|
|
|
6/21/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
4.15
|
|
Certificate of Designations of Series B Convertible Participating Preferred Stock of Visa Inc.
|
|
8-K
|
|
001-33977
|
|
|
6/21/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
4.16
|
|
Certificate of Designations of Series C Convertible Participating Preferred Stock of Visa Inc.
|
|
8-K
|
|
001-33977
|
|
|
6/21/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
10.1
|
|
Form of Indemnity Agreement
|
|
8-K
|
|
001-33977
|
|
|
10/25/2012
|
|
|
|
|
|
|
|
|
|
|
|
10.2
|
|
Amended and Restated Global Restructuring Agreement, dated August 24, 2007, by and among Visa Inc., Visa International Service Association, Visa U.S.A. Inc., Visa Europe Limited, Visa Canada Association, Inovant LLC, Inovant, Inc., Visa Europe Services, Inc., Visa International Transition LLC, VI Merger Sub, Inc., Visa USA Merger Sub Inc. and 1734313 Ontario Inc.
|
|
S-4/A
|
|
333-143966
|
|
|
9/13/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
10.3
|
|
Form of Escrow Agreement by and among Visa Inc., Visa U.S.A. Inc. and the escrow agent
|
|
S-4
|
|
333-143966
|
|
|
6/22/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
10.4
|
|
Form of Framework Agreement by and among Visa Inc., Visa Europe Limited, Inovant LLC, Visa International Services Association and Visa U.S.A. Inc. †
|
|
S-4/A
|
|
333-143966
|
|
|
7/24/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
10.5
|
|
Five Year Revolving Credit Agreement, amended and restated as of January 27, 2017, by and among Visa Inc., Visa International Service Association, Visa U.S.A. Inc., as borrowers, Bank of America, N.A., as administrative agent, JPMorgan Chase Bank N.A., as syndication agent, and the lenders referred to therein #
|
|
10-Q
|
|
001-33977
|
|
|
4/21/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
10.6
|
|
Form of Interchange Judgment Sharing Agreement by and among Visa International Service Association and Visa U.S.A. Inc., and the other parties thereto †
|
|
S-4/A
|
|
333-143966
|
|
|
7/24/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
10.7
|
|
Interchange Judgment Sharing Agreement Schedule
|
|
8-K
|
|
001-33977
|
|
|
2/8/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
10.8
|
|
Amendment of Interchange Judgment Sharing Agreement
|
|
10-K
|
|
001-33977
|
|
|
11/20/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
10.9
|
|
Form of Loss Sharing Agreement by and among Visa U.S.A. Inc., Visa International Service Association, Visa Inc. and various financial institutions
|
|
S-4/A
|
|
333-143966
|
|
|
7/24/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
10.10
|
|
Loss Sharing Agreement Schedule
|
|
8-K
|
|
001-33977
|
|
|
2/8/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
10.11
|
|
Amendment of Loss Sharing Agreement
|
|
10-K
|
|
001-33977
|
|
|
11/20/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
10.12
|
|
Form of Litigation Management Agreement by and among Visa Inc., Visa International Service Association, Visa U.S.A. Inc. and the other parties thereto
|
|
S-4/A
|
|
333-143966
|
|
|
8/22/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
10.13
|
|
Omnibus Agreement, dated February 7, 2011, regarding Interchange Litigation Judgment Sharing and Settlement Sharing by and among Visa Inc., Visa U.S.A. Inc., Visa International Service Association, MasterCard Incorporated, MasterCard International Incorporated and the parties thereto
|
|
8-K
|
|
001-33977
|
|
|
7/16/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
10.14
|
|
Amendment, dated August 26, 2014, to the Omnibus Agreement regarding Interchange Litigation Judgment Sharing and Settlement Sharing by and among Visa Inc., Visa U.S.A. Inc., Visa International Service Association, MasterCard Incorporated, MasterCard International Incorporated and the parties thereto
|
|
10-K
|
|
001-33977
|
|
|
11/21/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
10.15
|
|
Second Amendment, dated October 22, 2015, to Omnibus Agreement regarding Interchange Litigation Judgment Sharing and Settlement Sharing
|
|
10-K
|
|
001-33977
|
|
|
11/20/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
10.16
|
|
Settlement Agreement, dated October 19, 2012, by and among Visa Inc., Visa U.S.A. Inc., Visa International Service Association, MasterCard Incorporated, MasterCard International Incorporated, various U.S. financial institution defendants, and the class plaintiffs to resolve the class plaintiffs' claims in the matter styled In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, No. 05-MD-1720
|
|
10-Q
|
|
001-33977
|
|
|
2/6/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
10.17
|
|
Loss Sharing Agreement, dated as of November 2, 2015, among the UK Members listed on Schedule 1 thereto, Visa Inc. and Visa Europe Limited
|
|
8-K
|
|
001-33977
|
|
|
11/2/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
10.18
|
|
Litigation Management Deed, dated as of June 21, 2016, by and among the VE Member Representative, Visa Inc., the LMC Appointing Members, the UK&I DCC Appointing Members, the Europe DCC Appointing Members and the UK&I DCC Interested Members
|
|
8-K
|
|
001-33977
|
|
|
6/21/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
10.19*
|
|
Visa 2005 Deferred Compensation Plan, effective as of August 12, 2015
|
|
10-K
|
|
001-33977
|
|
|
11/20/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
10.20*
|
|
Visa Directors Deferred Compensation Plan, as amended and restated as of July 22, 2014
|
|
10-K
|
|
001-33977
|
|
|
11/21/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
10.21*
|
|
Visa Inc. 2007 Equity Incentive Compensation Plan, as amended and restated as of February 3, 2016
|
|
DEFA 14A
|
|
001-33977
|
|
|
1/12/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
10.22*
|
|
Visa Inc. Incentive Plan, as amended and restated as of February 3, 2016
|
|
DEF 14A
|
|
001-33977
|
|
|
12/11/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
10.23*
|
|
Visa Excess Thrift Plan, as amended and restated as of January 1, 2008
|
|
10-K
|
|
001-33977
|
|
|
11/21/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
10.24*
|
|
Visa Excess Retirement Benefit Plan, as amended and restated as of January 1, 2008
|
|
10-K
|
|
001-33977
|
|
|
11/21/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
10.25*
|
|
First Amendment, effective January 1, 2011, of the Visa Excess Retirement Benefit Plan, as amended and restated as of January 1, 2008
|
|
10-K
|
|
001-33977
|
|
|
11/18/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
10.26*
|
|
Visa Inc. Executive Severance Plan, effective as of November 3, 2010
|
|
8-K
|
|
001-33977
|
|
|
11/9/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
10.27*
|
|
Visa Inc. 2015 Employee Stock Purchase Plan
|
|
DEF 14A
|
|
001-33977
|
|
|
12/12/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
10.28*
|
|
Form of Visa Inc. 2007 Equity Incentive Compensation Plan Stock Option Award Agreement for awards granted after November 18, 2013
|
|
10-Q
|
|
001-33977
|
|
|
1/30/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
10.29*
|
|
Form of Visa Inc. 2007 Equity Incentive Compensation Plan Restricted Stock Award Agreement for awards granted after November 18, 2013
|
|
10-Q
|
|
001-33977
|
|
|
1/30/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
10.30*
|
|
Form of Visa Inc. 2007 Equity Incentive Compensation Plan Restricted Stock Unit Award Agreement for awards granted after November 18, 2013
|
|
10-Q
|
|
001-33977
|
|
|
1/30/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
10.31*
|
|
Form of Visa Inc. 2007 Equity Incentive Compensation Plan Performance Share Award Agreement for awards granted after November 18, 2013
|
|
10-Q
|
|
001-33977
|
|
|
1/30/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
10.32*
|
|
Form of Alternate Visa Inc. 2007 Equity Incentive Compensation Plan Stock Option Award Agreement for awards granted after November 18, 2013
|
|
10-Q
|
|
001-33977
|
|
|
1/30/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
10.33*
|
|
Form of Alternate Visa Inc. 2007 Equity Incentive Compensation Plan Restricted Stock Award Agreement for awards granted after November 18, 2013
|
|
10-Q
|
|
001-33977
|
|
|
1/30/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
10.34*
|
|
Form of Alternate Visa Inc. 2007 Equity Incentive Compensation Plan Restricted Stock Unit Award Agreement for awards granted after November 18, 2013
|
|
10-Q
|
|
001-33977
|
|
|
1/30/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
10.35*
|
|
Form of Visa Inc. 2007 Equity Incentive Compensation Plan Director Restricted Stock Unit Award Agreement for awards granted after November 18, 2013
|
|
10-Q
|
|
001-33977
|
|
|
1/30/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
10.36*
|
|
Form of Visa Inc. 2007 Equity Incentive Compensation Plan Director Restricted Stock Unit Award Agreement for awards granted after November 1, 2014
|
|
10-K
|
|
001-33977
|
|
|
11/21/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
10.37*
|
|
Form of Visa Inc. 2007 Equity Incentive Compensation Plan Stock Option Award Agreement for awards granted after November 1, 2014
|
|
10-K
|
|
001-33977
|
|
|
11/21/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
10.38*
|
|
Form of Visa Inc. 2007 Equity Incentive Compensation Plan Restricted Stock Award Agreement for awards granted after November 1, 2014
|
|
10-K
|
|
001-33977
|
|
|
11/21/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
10.39*
|
|
Form of Visa Inc. 2007 Equity Incentive Compensation Plan Restricted Stock Unit Award Agreement for awards granted after November 1, 2014
|
|
10-K
|
|
001-33977
|
|
|
11/21/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
10.40*
|
|
Form of Visa Inc. 2007 Equity Incentive Compensation Plan Performance Share Award Agreement for awards granted after November 1, 2014
|
|
10-K
|
|
001-33977
|
|
|
11/21/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
10.41*
|
|
Form of Alternate Visa Inc. 2007 Equity Incentive Compensation Plan Stock Option Award Agreement for awards granted after November 1, 2014
|
|
10-K
|
|
001-33977
|
|
|
11/21/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
10.42*
|
|
Form of Alternate Visa Inc. 2007 Equity Incentive Compensation Plan Restricted Stock Award Agreement for awards granted after November 1, 2014
|
|
10-K
|
|
001-33977
|
|
|
11/21/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
10.43*
|
|
Form of Alternate Visa Inc. 2007 Equity Incentive Compensation Plan Restricted Stock Unit Award Agreement for awards granted after November 1, 2014
|
|
10-K
|
|
001-33977
|
|
|
11/21/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
10.44*
|
|
Form of Visa Inc. 2007 Equity Incentive Compensation Plan Stock Option Award Agreement for awards granted after November 1, 2015
|
|
10-Q
|
|
001-33977
|
|
|
1/28/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
10.45*
|
|
Form of Visa Inc. 2007 Equity Incentive Compensation Plan Restricted Stock Unit Award Agreement for awards granted after November 1, 2015
|
|
10-Q
|
|
001-33977
|
|
|
1/28/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
10.46*
|
|
Form of Visa Inc. 2007 Equity Incentive Compensation Plan Performance Share Award Agreement for awards granted after November 1, 2015
|
|
10-Q
|
|
001-33977
|
|
|
1/28/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
10.47*
|
|
Form of Visa Inc. 2007 Equity Incentive Compensation Plan Restricted Stock Unit Award Agreement for the CEO, for the Make-Whole Award.
|
|
10-K
|
|
001-33977
|
|
|
11/15/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
10.48*
|
|
Form of Letter Agreement relating to Visa Inc. Executive Severance Plan
|
|
8-K
|
|
001-33977
|
|
|
11/9/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
10.49*
|
|
Aircraft Time Sharing Agreement, dated November 7, 2012, between Visa Inc. and Charles W. Scharf
|
|
8-K
|
|
001-33977
|
|
|
11/9/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
10.50*
|
|
Amendment No. 1 to the Aircraft Time Sharing Agreement, effective December 13, 2013, between Visa Inc. and Charles W. Scharf
|
|
10-K
|
|
001-33977
|
|
|
11/21/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
10.51*
|
|
Offer Letter, dated October 17, 2016, between Visa Inc. and Alfred F. Kelly, Jr.
|
|
8-K
|
|
001-33977
|
|
|
10/21/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
10.52*
|
|
Aircraft Time Sharing Agreement, dated November 9, 2016, between Visa Inc. and Alfred F. Kelly, Jr.
|
|
10-K
|
|
001-33977
|
|
|
11/15/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
10.53*
|
|
Offer Letter and One-Time Cash Award
Agreement, dated January 27, 2015, between
Visa Inc. and Vasant M. Prabhu
|
|
8-K
|
|
001-33977
|
|
|
2/2/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Computation of Ratio of Earnings to Fixed Charges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
List of Significant Subsidiaries of Visa Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consent of KPMG LLP, Independent Registered Public Accounting Firm
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certification of the Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certification of the Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
†
|
Confidential treatment has been requested for portions of this agreement. A completed copy of the agreement, including the redacted portions, has been filed separately with the SEC.
|
*
|
Management contract, compensatory plan or arrangement.
|
+
|
Filed or furnished herewith.
|
#
|
Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule will be furnished supplementally to the SEC upon request; provided, however, that the parties may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any document so furnished.
|
|
For the Years Ended September 30,
|
||||||||||||||||||
(in millions, except for ratios)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income before income taxes including non-controlling interest
|
$
|
11,694
|
|
|
$
|
8,012
|
|
|
$
|
8,995
|
|
|
$
|
7,724
|
|
|
$
|
7,257
|
|
Fixed charges
|
568
|
|
|
432
|
|
|
3
|
|
|
8
|
|
|
4
|
|
|||||
Other adjustments
|
—
|
|
|
1
|
|
|
3
|
|
|
1
|
|
|
4
|
|
|||||
Total earnings
|
12,262
|
|
|
8,445
|
|
|
9,001
|
|
|
7,733
|
|
|
7,265
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
(1)
|
568
|
|
|
432
|
|
|
3
|
|
|
8
|
|
|
4
|
|
|||||
Total fixed charges
|
568
|
|
|
432
|
|
|
3
|
|
|
8
|
|
|
4
|
|
|||||
Ratio of earnings to fixed charges
(2)
|
21.6
|
|
|
19.5
|
|
|
2,576.8
|
|
|
926.6
|
|
|
1,880.7
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Preferred stock dividends:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total preferred stock dividends
(3)
|
89
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total fixed charges and preferred stock dividends
|
$
|
657
|
|
|
$
|
445
|
|
|
$
|
3
|
|
|
$
|
8
|
|
|
$
|
4
|
|
Ratio of earnings to fixed charges and preferred stock dividends
(2),(3)
|
18.7
|
|
|
19.0
|
|
|
2,576.8
|
|
|
926.6
|
|
|
1,880.7
|
|
(1)
|
Interest expense in fiscal 2017 and 2016 primarily consists of interest expense on the fixed-rate senior notes issued in December 2015 and interest expense on deferred consideration related to the Visa Europe acquisition. Interest expense in fiscal 2017 also includes interest on the fixed-rate senior notes issued in September 2017.
|
(2)
|
Figures in the table may not recalculate exactly due to rounding. Ratios of earnings to fixed charges and to fixed charges and preferred stock dividends are calculated based on unrounded numbers.
|
(3)
|
In connection with Visa Europe acquisition, the Company issued preferred stock in June 2016, paying its first quarterly dividend starting in September 2016.
|
Name
|
|
Jurisdiction
|
Visa Europe Limited
|
|
United Kingdom
|
Visa International Holdings, Inc.
|
|
Delaware
|
Visa International Holdings Limited
|
|
United Kingdom
|
Visa International Service Association
|
|
Delaware
|
Visa U.S.A. Inc.
|
|
Delaware
|
Visa Worldwide Pte. Limited
|
|
Delaware
|
|
/s/ KPMG LLP
|
1.
|
I have reviewed this annual report on Form 10-K of Visa Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
November 16, 2017
|
|
/s/ Alfred F. Kelly, Jr.
|
|
|
|
Alfred F. Kelly, Jr.
Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this annual report on Form 10-K of Visa Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
November 16, 2017
|
|
/s/ Vasant M. Prabhu
|
|
|
|
Vasant M. Prabhu
Chief Financial Officer
(Principal Financial Officer)
|
•
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
•
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
|
Date:
|
November 16, 2017
|
|
/s/ Alfred F. Kelly, Jr.
|
|
|
|
Alfred F. Kelly, Jr.
Chief Executive Officer
(Principal Executive Officer)
|
•
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
•
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
|
Date:
|
November 16, 2017
|
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/s/ Vasant M. Prabhu
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Vasant M. Prabhu
Chief Financial Officer
(Principal Financial Officer)
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