Visa (V) 10-K risk factor changes: FY2016 vs FY2015

[removed: We] [added: Even though we] generally do not receive any revenue related to interchange reimbursement fees in a purchase transaction [removed: as those] [added: (those] fees are paid by the acquirers to the [removed: issuers.][added: issuers), interchange reimbursement fees are a factor on which we compete with other payments providers and are therefore an important determinant of the volume of transactions we process.]

Consequently, changes to these [removed: fees] [added: fees, whether voluntarily or by mandate,] can substantially affect our [removed: revenues and] overall payments [removed: volume.][added: volumes and revenues.]

[removed: We] [added: In the U.S. and many other jurisdictions, we] have historically set default interchange reimbursement [removed: rates in the U.S. and many other geographies.][added: fees.]

Interchange reimbursement [removed: rates, our] [added: fees, certain] operating rules and related practices [removed: have become] [added: continue to be] subject to [removed: continued or] increased government regulation globally, and regulatory authorities and central banks in a number of jurisdictions have reviewed or are reviewing these [removed: rates] [added: fees, rules] and practices.

[removed: It] [added: This] may increase the attractiveness of other payments [removed: systems like] [added: systems, such as our] competitors' closed-loop payments systems with direct connections to both merchants and consumers.

[removed: In addition, as a result of such regulations, we] [added: We] believe some issuers [removed: are] [added: may react to such regulations by] charging new or higher fees to [added: consumers, making our products less appealing to] consumers.

[removed: In certain instances, some] [added: Some] acquirers [added: may] elect to charge higher [added: merchant] discount rates [removed: to merchants,] regardless of the Visa interchange reimbursement rate, causing merchants not to accept [removed: Visa-branded cards or payment] [added: our] products or to steer [removed: account holders] [added: customers] to alternate [removed: payment systems or forms of payment.]

In addition, [added: in an effort to reduce the expense of their card programs,] some issuers and acquirers have obtained, and may continue to obtain, incentives from us and reductions in the fees that we [removed: charge in an effort to reduce the expense of their card programs.][added: charge, which may directly impact our revenues.]

For these reasons, [removed: additional] [added: increased global] regulation of [removed: interchange reimbursement rates] [added: the payments industry] may make [removed: Visa-branded cards and payment] [added: our] products less desirable, [added: diminish our ability to compete,] reduce our [removed: overall] transaction [removed: volumes,] [added: volumes] and harm our [removed: overall] business.

The Dodd-Frank Act [removed: already limits our and] [added: also limited] issuers' [added: and our] ability to adopt network exclusivity and preferred routing in the debit [removed: area.][added: and prepaid area, which also impacted our business.]

[removed: As of October 1,] [added: For example, in] 2011, in accordance with the [added: U.S.] Dodd-Frank Act, the [added: U.S.] Federal Reserve capped the maximum U.S. debit interchange reimbursement rate [removed: charged] [added: received] by large financial institutions at [removed: twenty-one] [added: 21] cents plus [removed: five] [added: 5] basis points, [removed: with] [added: plus] a possible fraud adjustment [removed: up to an additional one] [added: of 1] cent.

This amounted to a significant reduction in the average system-wide [added: interchange reimbursement] fees [removed: previously charged.][added: received by large issuers.]

[removed: New laws or] [added: Similarly, new] regulations [removed: in one jurisdiction or of] [added: involving] one product offering may [removed: lead] [added: prompt regulators] to [removed: new laws or] [added: extend the] regulations [removed: in other jurisdictions or of] [added: to] other product offerings.

Regulators around the world increasingly [added: take] note [added: of] each [removed: other's] [added: other’s] approaches to [removed: the regulation of] [added: regulating] the payments industry.

Consequently, a development in one [removed: country, state or region] [added: jurisdiction] may influence regulatory approaches in another.

See Note 20—Legal Matters [removed: to our consolidated financial statements included in Item 8] of this report.

For example, [removed: regulations affecting debit] [added: credit] payments could [removed: eventually spread] [added: become subject] to [removed: credit] [added: the same regulation as debit] payments.

The risks created by a new law or regulation [added: in one jurisdiction] have the potential to be replicated and to negatively affect our business in another [removed: region] [added: jurisdiction] or in other product offerings.

We may face differing rules and regulations in matters like interchange reimbursement rates, preferred routing, domestic processing requirements, currency conversion, [removed: point of sale] [added: point-of-sale] transaction rules and practices, privacy, [removed: and] data use or [removed: protection.][added: protection and associated product technology.]

As a result, the Visa Rules [added: and our other contractual commitments] may differ from country to country or by product offering.

If widely varying regulations come into existence worldwide, we may have difficulty rapidly adjusting our product offerings, services and fees, and other important aspects of our business in the various [removed: regions.][added: regions where we operate.]

[removed: Government actions] [added: Government-imposed restrictions on payment systems] may prevent us from competing [removed: effectively] against providers [removed: of domestic payments services] in certain countries.

These governments may impose regulatory requirements that favor domestic providers or that mandate domestic payments processing be done entirely in that [removed: country.][added: country, which would prevent us from overseeing the end-to-end processing of certain transactions.]

In China, for example, UnionPay continues to enjoy advantages over [added: other] international networks, remains the sole processor of domestic [added: payment card] transactions and operates the sole domestic acceptance mark.

Though the Chinese State Council has announced that international schemes, such as [removed: Visa,] [added: Visa] would be able to participate in the domestic market and be eligible to apply for a license to operate a Bank Card Clearing Institution (BCCI) in China, [removed: legislation and] [added: the full] implementation guidelines for BCCI’s have yet to be [removed: published and] finalized.

[removed: Meanwhile in] [added: In] Russia, [removed: National Payment Legislation] [added: legislation] has effectively prevented [removed: Visa] [added: us] from processing in the domestic market and [removed: has] mandated that [removed: Visa] [added: we] migrate [removed: its] [added: our] domestic processing business to the [removed: state owned NSPK,] [added: state-owned NSPK (or national payment card system),] which is the only entity allowed to process domestically.

[removed: But, as regulations continue to evolve and regulatory oversight continues to increase,] [added: However,] we cannot guarantee that our [removed: programs and policies] [added: practices] will be deemed compliant by all applicable regulatory authorities.

In the event our controls should fail or we are found to be out of compliance for other reasons, we could be subject to monetary damages, civil and criminal [removed: money] penalties, litigation and damage to our global [removed: brand] [added: brands and] reputation.

[removed: Failure] [added: The failure] of [removed: our U.S.] [added: one or both of the] retrospective responsibility [removed: plan] [added: plans] to [added: adequately] insulate us [removed: adequately] from the impact of such [removed: settlements] [added: settlements, judgments, losses] or [removed: judgments] [added: liabilities] could [removed: result in a material adverse effect on] [added: materially harm] our financial condition [removed: and] [added: or] cash [removed: flows.][added: flows, or even cause us to become insolvent.]

[removed: Like many other large companies, we] [added: We] are [removed: a defendant] [added: involved] in [removed: a number of] [added: numerous] civil actions and [added: government] investigations alleging violations of competition [removed: or] [added: and] antitrust law, consumer protection law [removed: or] [added: and] intellectual property law, among others.

Although we believe our tax estimates are reasonable, many factors may [removed: decrease] [added: limit] their accuracy.

We are currently under examination by, or in disputes with, the U.S. Internal Revenue [removed: Service and other] [added: Service, the U.K.’s HM Revenue & Customs as well as] tax [removed: authorities,] [added: authorities in other jurisdictions,] and we may be subject to additional examinations or disputes in the future.

Failure to sustain our position in these matters could [removed: result in a material, adverse effect on] [added: harm] our cash flow and financial position.

In addition, changes in existing laws, such as recent proposals for fundamental U.S. and international tax [removed: reform,] [added: reform or those resulting from the Base Erosion and Profit Shifting (BEPS) project being conducted by the Organization for Economic Cooperation and Development,] may also increase our effective tax rate.

In order to stay competitive, we offer incentives to our clients to increase payments volume, enter new market segments and expand their [removed: Visa-branded card base.][added: use and acceptance of Visa products and services.]

These include up-front cash payments, fee [removed: discounts,] [added: discounts and rebates,] credits, performance-based incentives, marketing and other support [removed: payments.][added: payments that impact our revenues and profitability.]

[added: In addition, we offer incentives to certain merchants or acquirers to] win routing preference in situations where [added: other network functionality is enabled on] our products [removed: co-reside with other networks] and [removed: merchants have] [added: there is] a choice of network routing options.

Our [added: financial institution] clients [added: and merchants] can reassess their commitments to us at any time or develop their own competitive services.

[removed: In] [added: Further, in] certain circumstances, our [added: financial institution] clients may [added: decide to] terminate [removed: these relationships] [added: our contractual relationship] on relatively short notice without [added: paying] significant early termination fees.

Because a significant portion of our operating revenues is concentrated among our largest clients, the loss of business from any [added: one] of these [added: larger] clients could [removed: have an adverse effect on the Company.][added: harm our business, results of operations and financial condition.]

Increased regulation of the global payments industry, including with respect to interchange reimbursement fees, operating rules and related practices, could harm our business.

Regulators around the world have been establishing or increasing their authority to regulate certain aspects of the payments industry.

See Item 1.

Business —Government Regulation for more information.

In 2015, the E.U.’s IFR placed an effective cap on consumer credit and consumer debit interchange fees for both domestic and cross border transactions (30 basis points and 20 basis points, respectively), significantly reducing the fees received by E.U. issuers.

E.U. Member States have the ability to further restrict these interchange levels within their territories.

More recently, in September 2016, Argentina's Senate approved a bill to reduce existing caps on the merchant discount rate charged by acquirers to 1.5% for credit transactions and zero for debit transactions.

In addition to the regulation of interchange reimbursement fees, a number of regulators impose restrictions on other aspects of our payments business.

For example, government regulations or pressure may require or allow other networks to be supported by Visa products or services or to have the other network's functionality or brand marks on our products.

As innovations in payment technology have enabled us to expand into new products and services, they have also expanded the potential scope of regulatory influence.

In addition, the E.U.’s requirement to separate scheme and processing adds costs and could impact the efficient integration of Visa Europe; the execution of our commercial, innovation and product strategies; our ability to provide effective customer service; and the amount of data available for use in fraud and risk systems and loyalty services.

We are also subject to central bank oversight in the U.K. and the E.U. This oversight could result in new governance, reporting, licensing, cybersecurity, processing infrastructure, capital or credit risk management requirements.

We could also be required to adopt policies and practices designed to mitigate settlement and liquidity risks, including increased requirements to maintain sufficient levels of capital and financial resources locally.

Increased central bank oversight could also lead to new or different criteria for financial institution participation in, and access to our payments system.

Additionally, regulators in other jurisdictions are considering or adopting approaches based on similar regulatory principles.

The U.S. Dodd-Frank Act and the E.U. IFR are developments with such potential, as are approaches taken by regulators in Australia, Canada and other countries.

Additionally, regulation in an individual country could continue and expand.

For example, in Australia the Reserve Bank of Australia (RBA) initially capped credit interchange, but subsequently capped debit interchange as well.

payments systems or forms of payment.

Governments in various jurisdictions, such as in Asia and the Gulf Cooperation Countries in the Middle East, protect certain domestic payment card networks, brands and processors.

National laws that protect domestic processing may increase our costs, decrease the number of Visa products issued or processed, impede us from utilizing our global processing capabilities and control the quality of the services supporting our brands, restrict our activities, force us to leave countries or prevent us from entering new markets, all of which could harm our ability to operate our business, maintain or increase our revenues globally and extend our global brands.

We are subject to complex and evolving global regulations that could harm our business and financial results.

As a global payments technology company, we are subject to complex and evolving regulations that govern our operations.

See Item 1—Business—Government Regulation for more information on the most significant areas of regulation that affect our business.

The impact of these regulations on us (and on our clients and other third parties) could limit our ability to enforce our payments system rules or require us to adopt new rules or change existing rules, and it may increase our compliance costs and reduce our revenue opportunities.

Further, as regulations change, they may affect our existing contractual arrangements.

Our compliance programs and policies are designed to support our compliance with a wide array of regulations and laws, and we continually enhance our compliance programs as regulations evolve.

Furthermore, the evolving and increased regulatory focus on the payments industry could reduce the number of Visa products our clients issue, the volume of payments we process and our revenue; negatively impact our brands and our competitive positioning; and limit the types of products and services that we offer, the countries in which our products are used and the types of customers and merchants who can obtain or accept our products, all of which could harm our business.

We may be adversely affected by the outcome of litigation or investigations, despite certain protections that are in place.

Details of the claims and the status of those proceedings are described more fully in Note 20—Legal Matters.

Legal and regulatory proceedings and investigations are inherently uncertain, expensive and disruptive to our operations.

In the event we are found liable in any material litigation, proceedings or investigations, particularly in a large class action lawsuit or an antitrust claim entitling the plaintiff to treble damages, we may be required to pay significant awards or settlements.

In addition, settlement terms, judgments or pressures resulting from legal proceedings or investigations may require us, to modify the default interchange reimbursement rates we set, revise the Visa Rules or the way in which we enforce our rules, modify our fees or pricing, or modify the way we do business, which may harm our business.

Finally, we are required by some of our commercial agreements to indemnify other entities for litigation asserted against them, even if Visa is not a defendant.

For certain litigation matters like the U.S. covered litigation and the VE territory covered litigation, which are described in Note 3—U.S. and Europe Retrospective Responsibility Plans and Note 20—Legal Matters, we have certain protections provided for in the respective retrospective responsibility plans.

The two retrospective responsibility plans are different in the protections they provide and the mechanisms by which we are able to either fund the settlements and judgments in the case of the U.S. covered litigation or recoup covered losses in the case of the VE territory covered litigation.

The global payments space is intensely competitive.

As technology evolves, new competitors emerge and existing clients and competitors assume different roles.

Our products compete with cash, checks, electronic funds, virtual currency payments, global or multi-regional networks, other closed-loop payments systems, and alternative payment providers primarily focused on enabling payments through ecommerce and mobile channels.

As the global payments space becomes more complex, we face increasing competition from our clients, emerging payment providers and other digital and technology companies.

Additional regulation of interchange reimbursement rates may reduce our transaction volumes and harm our overall business.

They are, however, a factor on which we compete with other payments providers and are therefore an important determinant of the volume of transactions we process.

We are subject to regulations that prohibit us from contracting with clients or requiring them to use only our network, or that deny them the option of selecting only our network.

In order to provide account holders a consistent experience and transparency into VisaNet, we promote certain practices to ensure that Visa-branded cards are processed over our network.

We have historically had agreements with some issuers under which they agree to issue certain payment cards that use only the Visa network or receive incentives if they do so.

In addition, certain issuers of some products have historically chosen to include only our network.

We refer to these various practices as network exclusivity.

In addition, certain network or issuer rules or practices may be viewed as limiting the routing options of merchants when multiple debit networks co-reside on Visa debit cards.

For example, the Visa Rules require that all authorization, clearance and settlement of international transactions must be done through VisaNet.

These are commonly referred to as routing rules.

Additional legislation or regulations like the Dodd-Frank Act in the U.S. and elsewhere could materially decrease the number of transactions we process.

In order to retain transaction volume, we may reduce the fees we charge to issuers or acquirers or increase the payments and other incentives we provide to issuers, acquirers or merchants.

Any of these outcomes could harm our overall business.

The Dodd-Frank Act and other regulations and developments arising from the Dodd-Frank Act may continue to harm our overall business.

The Federal Reserve also issued regulations requiring issuers to make at least two unaffiliated networks available for processing debit transactions on each debit card.

The rules

also prohibit us and issuers from restricting a merchant's ability to direct the routing of electronic debit transactions over any of the networks that an issuer has enabled to process those transactions.

These regulations have adversely affected our U.S. debit business and associated revenues by creating negative pressure on our pricing, reduced the volume and number of U.S. debit payments we process, and diminished associated revenues.

Although we believe we have absorbed the principal impact of the October 2011 regulations, our business could continue to be affected, including if the Federal Reserve issues new or revised regulations.

Negative pressures have arisen through various channels.

Other debit networks may become more aggressive in offering merchant cost reductions to win routing preference, which in turn puts more pressure on the business terms offered by Visa.

A number of our clients obtained fee reductions or increased incentives from us to offset their own lost revenue.

Some clients elected to issue fewer cards enabled with Visa-affiliated networks or reduced the number of debit cards they issued and investments they made in marketing and rewards programs, while others imposed new or higher fees on debit cards or demand deposit account relationships.

Many merchants have used the routing regulations to redirect transactions or steer account holders to other debit networks based on lower cost or other factors.

Other clients and merchants are likely to take similar actions in the future.

Some elements of the Dodd-Frank Act lack definition and create the potential for networks to pursue different strategies subject to their interpretation of the rules.

Our interpretation may result in a pursuit of strategies that may be less effective than those of our competitors.

Overall, the regulations and developments arising from the Dodd-Frank Act could harm our overall business.

The Dodd-Frank Act and the European Union interchange regulation are developments with such potential.

Similarly, new laws and regulations involving one product offering may cause lawmakers there to extend the regulations to other product offerings.

In addition, adverse developments, regulations and litigation with respect to our industry or another industry may also, by association, negatively impact our reputation and result in greater regulatory and legislative scrutiny or litigation against us.

Any of these factors could harm our overall business.

Governments in some countries provide resources to or protection for their domestic payment card networks, brands and processors.

National laws that mandate domestic processing may increase our costs and decrease the number of Visa-branded cards issued or processed in those regions.

These actions could impede us from utilizing our global processing capabilities for our financial institution clients in those countries and substantially restrict our activities there and in

other countries that may adopt similar practices.

These actions could also force us to leave countries where we presently have activity and keep us from entering new markets.

Although we are trying to effect change in these countries, we may not succeed.

This could adversely affect our ability to operate our business, maintain or increase our revenues globally and extend our global brands.

We are subject to regulation in the areas of consumer privacy and data use and security.

This management’s discussion and analysis provides a review of the results of operations, financial condition and liquidity and capital resources of Visa Inc. and its subsidiaries (“Visa,” “we,” [added: "us,"] “our” and the “Company”) on a historical basis and outlines the factors that have affected recent earnings, as well as those factors that may affect future earnings.

Visa is a global payments technology company that connects consumers, [removed: businesses,] [added: merchants,] financial [removed: institutions] [added: institutions, businesses, strategic partners] and [removed: governments] [added: government entities] in more than 200 countries and territories to fast, secure and reliable electronic payments.

We [removed: facilitate] [added: enable] global commerce through the transfer of value and information among [removed: financial institutions, merchants, consumers, businesses and government entities.][added: these participants.]

Our business performance during fiscal [removed: 2015] [added: 2016] reflects the impacts of continued uneven and tepid economic growth.

The preferred stock conversion rates may be reduced from time to time to offset certain liabilities, if any, which may be incurred by us, Visa Europe or its affiliates as a result of certain existing and potential litigation relating to the setting of multilateral interchange fee rates in the Visa Europe [removed: territory.][added: territory before the Closing.]

As part of the acquisition, we also entered into the U.K. loss sharing agreement with Visa Europe and certain of Visa Europe’s members located in the United Kingdom to compensate us for certain losses which may be incurred by us or Visa Europe as a result of certain existing and potential litigation relating to the setting and implementation of domestic multilateral interchange fee rates in the United [removed: Kingdom.][added: Kingdom before the Closing.]

See Note [removed: 2—Visa] [added: 2—Acquisition of Visa] Europe, Note 3—U.S. [removed: Retrospective Responsibility Plan] and [removed: Potential Visa] Europe [removed: Liabilities,] [added: Retrospective Responsibility Plans] and Note 20—Legal Matters to our consolidated financial statements.

Our [removed: non-GAAP] [added: as-reported U.S. GAAP and] adjusted [added: non-GAAP] net income and diluted earnings per share [removed: for fiscal 2015, 2014 and 2013] are [removed: as follows:][added: shown in the table below.]

| | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | | | [removed: 2015] [added: 2016] vs. [removed: 2014] [added: 2015] | | | [removed: 2014] [added: 2015] vs. [removed: 2013] [added: 2014] | |

| Net income, as [removed: adjusted(2)] [added: adjusted(3)] | $ | [removed: 6,438] [added: 6,862] | | | $ | [removed: 5,721] [added: 6,438] | | | $ | [removed: 4,980] [added: 5,721] | | | [removed: 13] [added: 7] | % | | [removed: 15] [added: 13] | % |

| Diluted earnings per share, as adjusted(2),(3) | $ | [removed: 2.62] [added: 2.84] | | | $ | [removed: 2.27] [added: 2.62] | | | $ | [removed: 1.90] [added: 2.27] | | | [removed: 16] [added: 8] | % | | [removed: 19] [added: 16] | % |

| [removed: (2)] [added: (3)] | Adjusted net income and diluted earnings per share in fiscal [added: 2016,] 2015 and 2014 exclude the impact of certain significant items that we believe are not indicative of our operating performance, as they [added: are] either [added: non-recurring,] have no cash impact or are [removed: related to amounts] covered by the U.S. retrospective responsibility plan. For a full reconciliation of our adjusted financial results, see tables in Adjusted financial results below. [removed: There were no comparable adjustments recorded during fiscal 2013.] |

| [removed: (3)] [added: (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 fiscal second quarter of 2015. |

During fiscal [removed: 2015,] [added: 2015] we recognized a tax benefit of $296 million resulting from the resolution of uncertain tax positions with taxing authorities.

Our financial results for the year ended September 30, 2014 reflect a one-time tax benefit of $191 million associated with a deduction for U.S. domestic production activities related to [added: prior] fiscal [removed: years 2013 and prior.][added: years.]

We recorded net operating revenues of [removed: $13.9] [added: $15.1] billion for fiscal [removed: 2015,] [added: 2016,] an increase of 9% over the prior year driven by continued growth in [removed: our underlying business drivers:] [added: processed transactions,] nominal payments [removed: volume; processed transactions; and cross-border volume.][added: volume as well as the fiscal fourth quarter operating revenues of Visa Europe.]

Our financial results for fiscal [added: 2016,] 2015 and 2014 reflect the impact of [added: certain] significant items that we [added: do not] believe are [removed: not] indicative of our [added: ongoing] operating performance in the prior or future years, as they [added: are] either [added: non-recurring,] have no cash impact or are [removed: related to amounts] covered by the U.S. retrospective responsibility plan.

As such, we believe the presentation of adjusted financial results excluding the following [removed: amounts] [added: items] provides a clearer understanding of our operating performance for the periods presented.

| • | Revaluation of Visa Europe put option. During the [added: first quarter of fiscal 2016 and the] third quarter of fiscal 2015, we recorded [added: a decrease of $255 million and] an increase of $110 [removed: million] [added: million, respectively,] in the fair value of the [removed: unamended] Visa Europe put option, resulting in the recognition of [removed: non-cash, non-operating] [added: non-cash income and] expense in [removed: our financial results. This amount is] [added: other non-operating income. These amounts are] not subject to income tax and therefore [removed: has] [added: have] no impact on our reported income tax provision. See Note [removed: 2—Visa] [added: 2—Acquisition of Visa] Europe [added: and Note 4—Fair Value Measurements and Investments] to our consolidated financial statements. |

| • | Litigation provision. During fiscal 2014, we recorded a litigation provision of $450 million and related tax benefits [added: of $167 million] associated with the [added: U.S.] interchange multidistrict litigation. The tax impact is determined by applying applicable federal and state tax rates to the litigation provision. Monetary liabilities from settlements of, or judgments in, the U.S. covered litigation will be paid from the [added: U.S.] litigation escrow account. See Note 3—U.S. [removed: Retrospective Responsibility Plan] and [removed: Potential Visa] Europe [removed: Liabilities] [added: Retrospective Responsibility Plans] and Note 20—Legal Matters to our consolidated financial statements. |

The following tables [removed: present] [added: reconcile] our [added: as-reported financial measures calculated in accordance with U.S. GAAP to the respective non-GAAP] adjusted financial [removed: results] [added: measures] for fiscal [added: 2016,] 2015 and [removed: 2014.][added: 2014:]

| | Fiscal 2015 | | | | | | | | | | | | | | [added: | | | | | | | |]

| (in millions, except [removed: for] percentages and per share data) | Operating Expenses | | | | Operating Margin (1),(2) | | | [added: Non-operating Income (Expense) | | | | Income Taxes | | | |] Net Income | | | | Diluted Earnings Per [removed: Share (2),(3)] [added: Share(2)] | | |

| As reported | $ | 4,816 | | | 65 | % | | $ | [added: (69 | ) | | $ | 2,667 | | | $ |] 6,328 | | | $ | 2.58 | |

| Revaluation of Visa Europe put option | — | | | | — | [added: %] | | 110 | | | | [added: — | | | | 110 | | | |] 0.04 | | |

| As adjusted | $ | 4,816 | | | 65 | % | | $ | [added: 41 | | | $ | 2,667 | | | $ |] 6,438 | | | $ | 2.62 | |

| Diluted weighted-average shares outstanding, as reported | | | | | | | | | | | | [added: | | | | | | | |] 2,457 | | |

| | Fiscal 2014 | | | | | | | | | | | | | | [added: | | | | | | | |]

| As reported | $ | 5,005 | | | 61 | % | | $ | [added: 27 | | | $ | 2,286 | | | $ |] 5,438 | | | $ | 2.16 | |

| Litigation provision | (450 | | ) | | 4 | % | | [added: — | | | | 167 | | | |] 283 | | | | 0.11 | | |

| As adjusted | $ | 4,555 | | | 64 | % | | $ | [added: 27 | | | $ | 2,453 | | | $ |] 5,721 | | | $ | 2.27 | |

| Diluted weighted-average shares outstanding, as reported | | | | | | | | | | | | [added: | | | | | | | |] 2,523 | | |

| Diluted weighted-average shares outstanding, as reported | | | | | | | | | | | | [removed: 2,624] | | | [added: | | | | | 2,414 | | |]

| (1) | Operating margin is calculated as operating income divided by [removed: total] [added: net] operating revenues. |

[removed: Class A common] [added: Common] stock [removed: split.][added: repurchases.]

See Note [removed: 14—Stockholders' Equity] [added: 9—Debt] to our consolidated financial statements.

During fiscal [removed: 2015,] [added: 2016,] we repurchased [removed: 44] [added: 91] million shares of our class A common stock in the open market using [removed: $2.9] [added: $7.0] billion of cash on hand.

As of September 30, [removed: 2015,] [added: 2016,] we had remaining authorized funds of [removed: $2.8] [added: $5.8] billion.

All share repurchase programs authorized prior to October [removed: 2014] [added: 2015] have been completed.

In October [removed: 2015,] [added: 2015 and July 2016,] our board of directors authorized [removed: an additional $5.0 billion] share repurchase [removed: program.][added: programs for $5.0 billion each.]

Our advanced transaction processing network facilitates authorization, clearing and settlement of payment transactions and enables us to provide our financial institution and merchant clients a wide range of products, platforms and value-added services.

On June 21, 2016, we acquired 100% of the share capital of Visa Europe.

The purchase price consisted of: (a) at the closing of the transaction (Closing), up-front cash consideration of €12.2 billion ($13.9 billion) and preferred stock convertible upon certain conditions into class A common stock or class A equivalent preferred stock, equivalent to a value of €5.3 billion ($6.1 billion) at the closing stock price of $77.33 on June 21, 2016, and (b) following the third anniversary of the Closing, an additional €1.0 billion, plus 4% compound annual interest.

Our consolidated balance sheets reflect the consolidation of Visa Europe as of September 30, 2016.

We did not include Visa Europe's financial results in our consolidated statements of operations from the acquisition date, June 21, 2016, through June 30, 2016 as the impact was immaterial.

Our consolidated statements of operations include the financial results of Visa Europe for the three months ended September 30, 2016.

Debt issuance.

In December 2015, we issued fixed-rate senior notes in an aggregate principal amount of $16.0 billion, with maturities ranging between 2 and 30 years.

Interest on these notes, at a rate ranging between 1.20% and 4.30%, is payable semi-annually on June 14 and December 14, commencing June 14, 2016.

The net aggregate proceeds of $15.9 billion, after deducting discounts and debt issuance costs, were used to fund the upfront cash portion of the purchase price for the acquisition of Visa Europe and for general corporate purposes, including share repurchases.

Our financial results for fiscal 2016 include the impact of several significant one-time items.

| Net income, as reported | $ | 5,991 | | | $ | 6,328 | | | $ | 5,438 | | | (5 | )% | | 16 | % |

| Diluted earnings per share, as reported(2) | $ | 2.48 | | | $ | 2.58 | | | $ | 2.16 | | | (4 | )% | | 20 | % |

| | | | | | | | | | | | | | | | | | |

Total operating expenses for fiscal 2016 were $7.2 billion, compared to $4.8 billion in fiscal 2015.

The increase over the prior year was primarily due to the $1.9 billion loss resulting from the effective settlement of the Framework Agreement between us and Visa Europe upon consummation of the transaction, combined with acquisition-related costs of approximately $152 million.

| • | Severance cost. In the fiscal fourth quarter, we recorded a $110 million charge for severance costs related to personnel reductions including planned reductions at Visa Europe. Although we routinely record severance expenses, these charges are larger than any past quarterly accrual due to the acquisition and integration of Visa Europe. Net of related tax benefit of $38 million, determined by applying applicable tax rates, the adjustment to net income was an increase of $72 million. |

| • | Remeasurement of deferred tax liability. In September 2016, we recorded a non-cash, non-recurring $88 million gain upon the remeasurement of a deferred tax liability, recorded upon the acquisition of Visa Europe, to reflect a tax rate change in the United Kingdom. |

| • | Acquisition-related costs. During 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 U.K. stamp duty recorded in general and administrative expenses. Net of related tax benefit of $56 million, determined by applying applicable |

federal and state tax rates, the adjustment to net income was an increase of $96 million.

| • | Visa Europe Framework Agreement loss. Upon consummation of the transaction, on June 21, 2016, we recorded a non-recurring loss of $1.9 billion, before tax, in operating expense resulting from the effective settlement of the Framework Agreement between us and Visa Europe. Net of related tax benefit of $693 million, determined by applying applicable federal and state tax rates, the adjustment to net income was an increase of $1.2 billion. See Note 2—Acquisition of Visa Europe to our consolidated financial statements. |

| • | 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. See Note 12—Derivative and Non-derivative Financial Instruments to our consolidated financial statements. |

| • | 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. 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. |

Adjusted operating expenses, operating margin, non-operating income, income taxes, net income and diluted earnings per share are non-GAAP financial measures and should not be relied upon as substitutes for measures calculated in accordance with U.S. GAAP.

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| | Fiscal 2016 | | | | | | | | | | | | | | | | | | | | | |

| 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 | |

| | | | | | | | | | | | | | | | | | | | | | | |

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| | | | | | | | | | | | | | | | | | | | | | | |

We provide our financial institution clients with a global payments infrastructure and support services for the delivery of Visa-branded payment products, including credit, debit and prepaid.

Each of these constituencies has played a key role in the ongoing worldwide migration from paper-based to electronic forms of payment, and we believe that this transformation continues to yield significant growth opportunities, particularly outside the United States.

We continue to explore additional opportunities to enhance our competitive position by expanding the scope of payment solutions we provide.

On November 2, 2015, we entered into a transaction agreement with Visa Europe, pursuant to which we agreed to acquire 100% of the share capital of Visa Europe for a total purchase price of up to €21.2 billion.

The purchase price consists of: (a) at the closing of the transaction, up-front cash consideration of €11.5 billion and preferred stock convertible upon certain conditions into class A common stock or class A equivalent preferred stock, valued at approximately €5.0 billion, and (b) following the end of sixteen fiscal quarters post-closing, contingent cash consideration of up to €4.0 billion (plus up to an additional €0.7 billion in interest), determined based on the achievement of specified net revenue levels during such post-closing period.

In conjunction with the transaction agreement, the Visa Europe put option was amended to align the terms on which Visa Europe may exercise its rights under the put option agreement with the terms of the transaction agreement.

The purchase of Visa Europe's share capital will be effected through the exercise of the amended Visa Europe put option.

The closing of our acquisition of Visa Europe is subject to regulatory approvals and other customary conditions, and is currently expected to occur in our fiscal third quarter of 2016.

During fiscal 2015, we recorded net income of $6.3 billion or diluted class A earnings per share of $2.58, an increase of 16% and 20% over the prior year, respectively.

The general strengthening of the U.S. dollar during the year resulted in a two-and-a-half- percentage point decline in total operating revenue growth.

Total operating expenses for fiscal 2015 were $4.8 billion, a decrease of 4% over the prior year, primarily due to the absence of a $450 million litigation provision associated with the interchange multidistrict litigation recorded in fiscal 2014.

Excluding this provision, operating expenses increased by 6% over prior year adjusted operating expenses, primarily due to increases in personnel, additional depreciation from our ongoing investments in technology assets and infrastructure, and general and administrative expenses.

The increases were partially offset by decreases in network and processing and marketing expenses.

There were no comparable adjustments recorded during fiscal 2013.

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| | Fiscal 2013 | | | | | | | | | | | | | |

| As reported | $ | 4,539 | | | 61 | % | | $ | 4,980 | | | $ | 1.90 | |

In January 2015, Visa’s board of directors declared a four-for-one split of its class A common stock.

Each class A common stockholder of record at the close of business on February 13, 2015 ("Record Date") received a dividend of three additional shares on March 18, 2015 for every share held as of the Record Date.

Trading began on a split-adjusted basis on March 19, 2015.

Holders of class B and C common stock did not receive a stock dividend.

Instead, the conversion rate for class B common stock increased to 1.6483 shares of class A common stock per share of class B common stock, and the conversion rate for class C common stock increased to 4.0 shares of class A common stock per share of class C common stock.

Immediately following the split, the class A, B and C stockholders retained the same relative ownership percentages that they had prior to the stock split.

Reduction in as-converted class A common stock.

| Consumer debit(3) | 1,201 | | | | 1,128 | | | | 7 | % | | 463 | | | | 454 | | | | 2 | % | | 1,665 | | | | 1,581 | | | | 5 | % |

| Total nominal volume(5) | $ | 3,086 | | | $ | 2,838 | | | 9 | % | | $ | 4,306 | | | $ | 4,320 | | | — | % | | $ | 7,392 | | | $ | 7,158 | | | 3 | % |

| | 2014 | | | | 2013 | | | | % Change | | | 2014 | | | | 2013 | | | | % Change | | | 2014 | | | | 2013 | | | | % Change | |

| Consumer credit | $ | 872 | | | $ | 786 | | | 11 | % | | $ | 1,600 | | | $ | 1,498 | | | 7 | % | | $ | 2,472 | | | $ | 2,284 | | | 8 | % |

| Consumer debit(3) | 1,128 | | | | 1,046 | | | | 8 | % | | 454 | | | | 392 | | | | 16 | % | | 1,581 | | | | 1,438 | | | | 10 | % |

| Commercial(4) | 370 | | | | 334 | | | | 11 | % | | 145 | | | | 140 | | | | 3 | % | | 515 | | | | 474 | | | | 9 | % |

| Total nominal payments volume | $ | 2,369 | | | $ | 2,167 | | | 9 | % | | $ | 2,198 | | | $ | 2,030 | | | 8 | % | | $ | 4,567 | | | $ | 4,197 | | | 9 | % |

| Cash volume | 469 | | | | 446 | | | | 5 | % | | 2,122 | | | | 2,083 | | | | 2 | % | | 2,591 | | | | 2,530 | | | | 2 | % |

| Total nominal volume(5) | $ | 2,838 | | | $ | 2,613 | | | 9 | % | | $ | 4,320 | | | $ | 4,113 | | | 5 | % | | $ | 7,158 | | | $ | 6,726 | | | 6 | % |

| Consumer credit | 5 | % | | 13 | % | | 7 | % | | 13 | % | | 7 | % | | 13 | % | | 8 | % | | 12 | % |

| Consumer debit(3) | 2 | % | | 14 | % | | 16 | % | | 24 | % | | 5 | % | | 9 | % | | 10 | % | | 12 | % |

| Commercial(4) | 4 | % | | 13 | % | | 3 | % | | 10 | % | | 9 | % | | 12 | % | | 9 | % | | 11 | % |

| Cash volume growth | (5 | )% | | 8 | % | | 2 | % | | 9 | % | | (3 | )% | | 7 | % | | 2 | % | | 8 | % |

| Total volume growth | — | % | | 11 | % | | 5 | % | | 12 | % | | 3 | % | | 10 | % | | 6 | % | | 10 | % |

Service revenues consist mainly of revenues earned for providing financial institution clients with support services for the delivery of Visa-branded payment products and solutions.

[removed: Although most of our activities are transacted in U.S. dollars, we] [added: We] are exposed to adverse fluctuations in foreign currency exchange rates.

Risks from foreign currency exchange rate fluctuations are primarily related to adverse changes in the [removed: U.S. dollar] [added: functional currency] value of revenues generated from foreign currency-denominated transactions and adverse changes in the [removed: U.S. dollar] [added: functional currency] value of payments in foreign [removed: currencies, primarily for expenses at our non-U.S. locations.][added: currencies.]

We manage these risks by entering into foreign currency forward contracts that hedge exposures of the variability in the [removed: U.S. dollar] [added: functional currency] equivalent of anticipated [removed: non-U.S. dollar] [added: non-functional currency] denominated cash flows.

The aggregate notional amounts of our foreign currency forward contracts outstanding in our exchange rate risk management program, including contracts not designated for cash flow hedge accounting, were [removed: $1.2] [added: $2.7] billion and [removed: $1.3] [added: $1.2] billion at September 30, [removed: 2015] [added: 2016] and [removed: 2014,] [added: 2015,] respectively.

The aggregate notional amount outstanding at September 30, [removed: 2015] [added: 2016] is fully consistent with our strategy and treasury policy aimed at reducing foreign exchange risk below a predetermined and approved threshold.

The effect of a hypothetical 10% [removed: change] [added: increase or decrease] in the value of the [removed: U.S. dollar] [added: functional currencies] is estimated to create an additional fair value gain [added: of approximately $160 million] or loss of approximately [removed: $91 million] [added: $190 million, respectively,] on our foreign currency forward contracts outstanding at September 30, [removed: 2015.][added: 2016.]

See Note 1—Summary of Significant Accounting Policies and Note 12—Derivative [added: and Non-derivative] Financial Instruments to our consolidated financial statements.

Neither our operating results or cash flows have been, nor are [added: they] expected to be, materially impacted by a sudden change in market interest rates.

The fair value balances of our fixed-rate investment securities at September 30, [removed: 2015] [added: 2016] and [removed: 2014] [added: 2015] were [removed: $4.4] [added: $5.1] billion and [removed: $3.0] [added: $4.4] billion, respectively.

A hypothetical 100 basis point increase or decrease in interest rates would create an estimated change in fair value of approximately [removed: $48] [added: $49] million on our fixed-rate investment securities at September 30, [removed: 2015.][added: 2016.]

The fair value balances of our adjustable-rate debt securities were [removed: $1.7] [added: $2.2] billion and [removed: $1.9] [added: $1.7] billion at September 30, [removed: 2015] [added: 2016] and [removed: 2014,] [added: 2015,] respectively.

At September 30, [removed: 2015] [added: 2016] and [removed: 2014,] [added: 2015,] our U.S. defined benefit pension plan assets were [removed: $1.0] [added: $1.1] billion and [removed: $1.1] [added: $1.0] billion, respectively, and projected benefit obligations were [removed: $1.0] [added: $1.1] billion and [removed: $983 million,] [added: $1.0 billion,] respectively.

A hypothetical 10% decrease in the value of pension plan assets and a 1% decrease in the discount rate would result in an aggregate decrease of approximately [removed: $248] [added: $127] million in the funded status and an increase of approximately [removed: $30] [added: $9] million in pension cost.

We will continue to monitor the performance of pension plan assets and market conditions as we evaluate the amount of our contribution to the pension plan for fiscal [removed: 2016,] [added: 2017,] if any, which would be made in September [removed: 2016.][added: 2017.]

On June 21, 2016, we acquired 100% of the share capital of Visa Europe.

On the third anniversary of the Closing, we will pay additional purchase consideration of €1 billion, plus 4.0% compound annual interest.

See Note 2—Acquisition of Visa Europe to our consolidated financial statements.

As such, we are exposed to foreign currency exchange rate risk with respect to fluctuations of the U.S. dollar against the euro.

A hypothetical 10% decline in the U.S. dollar against the euro, compared to the exchange rate at September 30, 2016, would increase the deferred purchase consideration liability by $123 million, including interest.

We are further exposed to foreign currency exchange rate risk as the functional currency of Visa Europe is the euro.

Translation from the euro to the U.S. dollar is performed for balance sheet accounts using exchange rates in effect at the balance sheet date and for revenue and expense accounts using an average exchange rate for the period.

Resulting translation adjustments are reported as a component of accumulated other comprehensive income or loss on the consolidated balance sheets.

A hypothetical 10% change in the euro against the U.S. dollar compared to the exchange rate at September 30, 2016, could result in a foreign currency translation adjustment of $1.9 billion.

In the third quarter, we designated our euro-denominated deferred consideration liability as a net investment hedge against a portion of our net investment in Visa Europe.

Changes in the value of the deferred cash consideration liability, attributable to a change in exchange rates at the end of each reporting period, partially offset the foreign currency translation of the Company's net investment recorded in accumulated other comprehensive income in the Company's consolidated balance sheet.

See Note 1—Summary of Significant Accounting Policies and Note 12—Derivative and Non-derivative Financial Instruments to our consolidated financial statements.

A hypothetical 10% decrease in the value of pension plan assets and a 1% decrease in the discount rate would result in an aggregate decrease of approximately $254 million in the funded status and an increase of approximately $40 million in pension cost.

At September 30, 2016, our non-U.S. defined benefit pension plan assets were $415 million and projected benefit obligations were $474 million.

A material adverse decline in the value of pension plan assets and/or the discount rate for benefit obligations would result in a decrease in the funded status of the pension plan, an increase in pension cost and an increase in required funding.

Visa Europe Put Option

We have a liability related to the put option with Visa Europe, which is recorded at fair value at September 30, 2015 based on its unamended terms.

We are required to assess the fair value of the put option on a quarterly basis and record adjustments as necessary.

In the determination of the fair value of the unamended put option at September 30, 2015, we assumed a 40% probability of exercise by Visa Europe at some point in the future and a P/E differential, at the time of exercise, of approximately 1.5x.

The use of a probability of exercise 5% higher than our estimate would have resulted in an increase of approximately $37 million in the value of the unamended put option.

An increase of 1.0x in the assumed P/E differential would have resulted in an increase of approximately $249

million in the value of the unamended put option.

See Liquidity and Capital Resources and Critical Accounting Estimates above.

[removed: General Business Developments][added: SIGNIFICANT BUSINESS DEVELOPMENTS]

Visa [removed: Inc., which we refer to as Visa or the Company,] is a global payments technology company that connects consumers, [removed: businesses,] [added: merchants,] financial [removed: institutions] [added: institutions, businesses, strategic partners] and [removed: governments] [added: government entities] in more than 200 countries and territories to fast, secure and reliable electronic payments.

[removed: Visa is] [added: We are] not a bank and [removed: does] [added: do] not issue cards, extend credit or set rates and fees for account holders on [removed: Visa-branded cards and payment] [added: Visa] products.

In most cases, [added: our financial institution clients are responsible for and manage] account holder and merchant [removed: relationships belong to, and are managed by, our financial institution clients.][added: relationships.]

We do not earn revenues from, or bear credit risk with respect to, interest or fees paid by account holders on [removed: Visa-branded cards or payment] [added: Visa] products.

We [added: administer the collection and remittance of interchange reimbursement fees through the settlement process, but we] generally do not receive any revenue related to interchange reimbursement fees.

In addition, we [removed: generally] do not [removed: earn any] [added: receive as] revenue [removed: from] [added: any of] the fees that merchants are charged [added: directly] for acceptance by the [removed: acquirers, including the merchant discount rate.][added: acquirers.]

A typical Visa transaction begins when the account holder presents his or her [removed: Visa-branded card or payment] [added: Visa] product to a merchant as payment for goods or services.

[removed: ][added: ]

Our [removed: operating] [added: gross] revenues are principally comprised of service revenues, data processing [removed: revenues and] [added: revenues,] international transaction [removed: revenues,] [added: revenues] and [removed: are reduced by costs incurred under client incentive arrangements.][added: other revenues.]

[removed: The Company has] [added: We have] one reportable segment, Payment Services.

Core Products [removed: and Services]

Our core [added: transaction] processing services involve the routing of payment information and related data to facilitate the authorization, clearing and settlement of transactions between our issuers and acquirers.

VisaNet is built on a centralized architecture, enabling us to [removed: view and] analyze each authorization [removed: transaction] we process in real time and [removed: to] provide value-added [added: processing] services, [removed: including information products,] such as risk scoring and [removed: loyalty applications, while the transaction data is being routed through our network.][added: tokenization.]

[removed: Visa's] [added: Our] processing services [removed: continue to expand to] [added: also] address the [added: varied] needs of [added: other] participants in the evolving payments ecosystem, through such offerings as our merchant gateway and Visa [removed: Debit Processing Services ("DPS").][added: DPS issuer processing.]

Merchant gateway [removed: services] [added: services,] provided through [removed: our CyberSource subsidiaries] [added: CyberSource,] enable [removed: gateway routing and other services that make it easier for eCommerce] merchants to accept, process and reconcile payments, manage fraud and safeguard payment security [removed: online.][added: online and in-store.]

DPS provides comprehensive issuer processing services for participating issuers of Visa debit, prepaid and ATM [removed: payment] products.

These and other services support our issuers and acquirers and their use of our products, and promote the growth and security of our payments [removed: network.][added: network by expanding the payment value chain and increasing network utilization.]

VisaNet consists of multiple synchronized processing [removed: centers, including two data] centers [removed: in the U.S.] that are linked by a global telecommunications network and [removed: are] engineered for [removed: redundancy.][added: minimal downtime and uninterrupted connectivity.]

[removed: Through] [added: We give our clients access to these assets through] agreements with our [removed: issuers, we] [added: issuers and acquirers, which] authorize the use of our trademarks in connection with their participation in our payments network.

We [added: also] own a number of [removed: patents and] [added: patents,] patent applications [added: and other intellectual property] relating to payment solutions, transaction processing, security systems and other matters.

No individual quarter of fiscal [removed: 2015] [added: 2016] or fiscal [removed: 2014] [added: 2015] accounted for more than 30% of our operating revenues in those years.

[added: Most] U.S. dollar settlements are [removed: typically] settled within the same day and do not result in a receivable or payable balance, while settlement in currencies other than the U.S. dollar generally remain outstanding for one to two business days, which is consistent with industry practice for such transactions.

[removed: Concentration of Business and Financial Information About Geographic Areas][added: FINANCIAL INFORMATION ABOUT GEOGRAPHIC AREAS]

We compete [removed: in the global payment marketplace] against all forms of payment.

[removed: | • |] [added: This includes] paper-based payments, [removed: principally] [added: primarily] cash and [removed: checks; |][added: checks, and all forms of electronic payments.]

[removed: Based on payments volume, total volume and number of transactions,] Visa is [added: one of] the [added: world’s] largest retail electronic payments network [removed: used throughout the world.][added: based on payments volume, number of transactions and number of cards in circulation.]

The following chart compares our network with [removed: those of our major] [added: these network] competitors for calendar year [removed: 2014:][added: 2015(1):]

| (1) | UnionPay, which operates primarily within the Chinese domestic market, is not included in this table [removed: because] [added: 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. |

| (2) | The data presented are provided by our financial institution clients. Previously submitted information may be updated and all data are subject to review by Visa. Visa Europe data are [removed: not] included. |

| (3) | MasterCard, American Express, [removed: JCB,] [added: JCB] and Discover/Diners Club data sourced from The Nilson Report issue [removed: 1060 (March 2015).] [added: 1085 (April 2016).] 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. [removed: Certain general purpose payments network competitors are more concentrated in specific geographic regions, such as JCB in Japan and Discover in the U.S. Our competitors also have leading positions in certain countries. For example, UnionPay remains the sole processor of domestic transactions and operates the sole domestic acceptance mark in China.] |

We believe our fundamental value proposition of [removed: convenience, interoperability, accessibility] [added: acceptance, security, convenience] and [removed: security] [added: universality] offers us a key competitive advantage.

[removed: We do so by partnering with local financial institutions, merchants, governments, non-governmental] organizations and business organizations to provide tailored solutions to meet their varied needs.

Interchange [removed: reimbursement fees.][added: Rates and Fees.]

[removed: Certain] [added: An increasing number of] jurisdictions [removed: outside] [added: around] the [removed: U.S. also] [added: world] regulate or [removed: have the power to regulate] [added: influence] debit and credit interchange reimbursement rates in their regions.

[removed: The] [added: In the U.S., the] Dodd-Frank Act limits [removed: the issuers' and our ability to impose rules for, or choose various forms of,] network exclusivity and preferred routing [removed: in] [added: for] the [removed: U.S.] debit and prepaid [removed: network] market segments.

We have historically [removed: implemented] [added: enforced] rules that prohibit merchants from charging higher prices to consumers who pay using [removed: their Visa-branded card or payment product] [added: Visa products] instead of other means.

[added: Anti-corruption,] Anti-money [removed: laundering, anti-terrorism] [added: Laundering, Anti-terrorism] and [removed: sanctioned countries.][added: Sanctions.]

We are [added: also] subject to anti-money laundering [added: and anti-terrorist financing] laws and regulations, including the U.S. Bank Secrecy Act and the [added: USA] PATRIOT Act.

Government-imposed [removed: market participation influences] [added: Market Participation] and [removed: restrictions.][added: Restrictions.]

OVERVIEW

We enable global commerce through the transfer of value and information among these participants.

Our advanced transaction processing network facilitates authorization, clearing and settlement of payment transactions and enables us to provide our financial institution and merchant clients a wide range of products, platforms and value-added services.

Our vision is to be the best way to pay and be paid for everyone, everywhere.

To deliver on this vision, we focus on six strategic goals:

| • | Evolve our client interactions to build deeper partnerships with financial institutions, merchants and new industry partners; |

| • | Transform Visa’s technology assets to drive efficiency and enable innovation; |

| • | Achieve success as a leading partner for digital payments comparable to what we have achieved in the physical world; |

| • | Expand access to Visa products and services globally; |

| • | Champion payment system security for the industry; and |

| • | Be the employer of choice for top talent. |

Visa Network

* Total volume includes Europe for the fourth quarter.

Visa operates in a four party model, which includes card issuing financial institutions, acquirers and merchants.


Visa Brand

The Visa brand is one of the most well-known and valuable brands in the world.

Anchored on the notion that Visa is 'everywhere you want to be,' the brand stands for acceptance, security, convenience and universality.

In recognition of its strength among clients and consumers, the Visa brand is ranked highly in a number of widely recognized brand studies, including the 2016 BrandZ Top 100 Most Valuable Global Brands Study (#6), Interbrand’s 2016 Best Global Brands (#61) and Forbes 2016 World’s Most Valuable Brands (#30).

We leverage our brand strength to deliver added value to financial institutions, merchants and other clients through compelling brand expressions, expanded products and services, and innovative marketing efforts.

Payment Security

Security is critical to maintaining trust and confidence in electronic payments.

To ensure that Visa remains one of the safest ways to pay and be paid, we deploy a multi-layered security approach focused on eliminating vulnerable data from the payments environment, securing the data that remains, preventing fraud and empowering system participants to protect themselves.

This approach has historically kept fraud rates low as payment volumes have grown.

With commerce moving to digital channels, we are investing in new technologies and solutions in order to maintain the trust that consumers, clients and merchants place in Visa.

This requires innovation, leadership and cross-industry collaboration.

Fiscal 2016 Key Statistics


*Please see Item 7—Management's Discussion and Analysis of Financial Condition and Results of Operations for a reconciliation of our adjusted financial results.

KEY INITIATIVES

Visa Europe Acquisition.

Prior to our 2007 reorganization, Visa operated as a collection of member-owned associations, with each region serving its member financial institutions and administering Visa programs within a global framework.

In 2007, Visa reorganized, with all of the regions except Visa Europe coming together to form Visa Inc., a Delaware corporation.

Visa Europe remained owned by its European member financial institutions.

On June 21, 2016, we acquired Visa Europe.

We believe the acquisition positions our Company to create additional value through increased scale, efficiencies realized by integration of the businesses, and benefits related to Visa Europe's transition from a member-owned association to a for-profit enterprise.

We plan to bring Visa's global capabilities to our European clients, deliver a more seamless experience operating as one single global company and grow our business in that region.

As part of the acquisition, we acquired 100% of the share capital of Visa Europe for €12.2 billion ($13.9 billion) and €5.3 billion ($6.1 billion) in preferred stock, with an additional €1.0 billion, plus 4% compound annual interest, to be paid on June 21, 2019.

Capital Structure.

In December 2015, we issued $16 billion of senior notes with maturities ranging between two and 30 years, and in June 2016, we issued two new series of preferred stock to Visa Europe's member financial institutions that are convertible into approximately 79 million shares of class A common stock as part of the Visa Europe transaction.

We operate one of the world's most advanced processing networks —VisaNet — which facilitates authorization, clearing and settlement of payment transactions worldwide.

It also offers fraud protection for account holders and rapid payment for merchants.

Visa Inc. was incorporated in the State of Delaware in May 2007.

In October 2007, we undertook a reorganization in which Visa U.S.A. Inc., Visa International Service Association, Visa Canada Corporation and Inovant LLC became direct or indirect subsidiaries of Visa Inc. Visa Europe Limited remains owned and governed by its European member financial institutions and is not a subsidiary of Visa Inc. Visa Inc. completed its initial public offering ("IPO") in March 2008.

General business developments in fiscal 2015 included the following:

| | |

| --- | --- |

| • | Product innovation. Visa’s fundamental approach to innovation focuses on: (i) supporting an evolving payments ecosystem; (ii) enhancing payment system security through innovation; and (iii) developing new platforms, products and services. |

| i. | Evolving payments ecosystem. By providing new and existing clients and partners greater access to Visa’s network and payment capabilities, Visa is contributing to the evolving payments ecosystem. Through Visa's new developer center, financial institutions, software, cloud computing and other technology companies and new entrants will be able to more easily access Visa payment capabilities through programing interfaces and software developer kits beginning in 2016. The Visa Ready program also is intended to enable our partners to quickly deploy devices, software and services to consumers that meet Visa's standards, with a goal of significantly accelerating the pace of innovation in payments. |

| ii. | Enhancing payment system security through innovation. During 2015, Visa continued to make strides to enhance the security of the broader payments ecosystem with the following programs: |

| a. | Tokenization: Tokenization replaces account numbers with digital tokens for online and mobile payments. This benefits merchants and our financial institution clients by removing sensitive account information from online and mobile payments and has the potential to reduce fraud risk. Visa has been working with several partners, including Apple, Google and Samsung, who are using our tokenization service to offer mobile payment solutions. |

| b. | EMV chip payment technology: Visa is addressing fraud at the physical point-of-sale by working with merchants and our financial institution clients in the U.S. to introduce EMV-chip payment technology. |

| c. | Fraud and data analytics: As an industry leader in payment security, we enhanced our real-time data analytics capabilities. When combined with Visa’s centralized network structure, these capabilities help our financial institution clients and merchants identify and address fraud. |

| iii. | New platforms, products and services. Visa continues to develop new platforms, products and services to benefit clients, merchants, consumers and other partners. |

| a. | Bangalore Technology Center: We are investing in internal technology resources and have recently opened a new technology development center in Bangalore, India that will play a central role in the Company’s efforts to accelerate digital commerce globally. The new technology center, a combination of office and collaboration space for more than 1,000 Visa developers, is Visa’s largest outside the U.S. |

| b. | Visa Checkout: Visa Checkout is a fast, simple and intuitive payment experience that allows consumers to pay for goods online on a smartphone, tablet, laptop or desktop, in just a few clicks. This service is presently available for eCommerce merchants and financial institutions in 16 countries around the world including Australia, Argentina, Brazil, Canada, Chile, China, Colombia, Hong Kong, Malaysia, Mexico, New Zealand, Peru, Singapore, South Africa, United Arab Emirates, and the U.S. |

| c. | Visa payWave: With Visa payWave technology, consumers are able to pay for products and services via smart phone or other devices, and by using their contactless cards at physical retailers. |

| d. | Visa Direct: Visa Direct provides a fast, secure and convenient solution for Visa’s ecosystem of clients and partners. It enables customers to send and receive person-to-person payments and funds disbursements, and facilitates business to business settlements directly to eligible Visa account holders quickly and securely. |

| e. | mVisa: In August 2015, Visa and several banks in India launched a pilot program testing mVisa, a mobile application, in India. The service extends the utility of existing Visa accounts by linking a consumer’s Visa debit, credit or prepaid accounts to the mVisa mobile application that enables purchases in store, online and person-to-person through his or her mobile device. |

| • | U.S. Regulation. Rules were implemented in the U.S. during 2011 and 2012 with respect to debit products under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), which regulates, among other things, debit interchange reimbursements rates, the availability of debit networks on a debit card and merchant transaction routing choice. The Federal Reserve's interpretation of the debit interchange provisions of the Dodd-Frank Act was upheld in March 2014 by the Court of Appeals for the D.C. Circuit. After the Supreme Court declined to review the ruling, the Federal Reserve on August 10, 2015 confirmed its position on the sole remaining issue related to the interchange cost calculation, leaving the debit interchange rules in effect as originally adopted. See Government Regulation below. |

| • | Fiscal 2015 developments in Russia. In response to U.S. and EU sanctions targeting Russia's financial sector, the Russian government modified its National Payments Systems laws to require that all payment transactions in the Russian Federation be processed within the country. We agreed in February 2015 to transfer processing of Russian domestic transactions to the government-owned processor. Additionally, a new Russian law requiring all personal data of its citizens to be stored in Russia went into effect on September 1, 2015. Authorities have also indicated that Russia will issue a new national payment card called the "MIR" card. See Government Regulation—Government-imposed market participation influences and restrictions below. |

On November 2, 2015, the Company and Visa Europe entered into a transaction agreement pursuant to which the Company agreed to acquire Visa Europe.

Closing of the acquisition is subject to various conditions including regulatory approvals, and is expected to occur in the fiscal third quarter of 2016.

See Note 2—Visa Europe to our consolidated financial statements included in Item 8 of this report.

Nature of Operations

Visa's mission is to accelerate the electronification of commerce.

We operate an open-loop payments network, VisaNet, through which Visa connects and manages the exchange of information and value between: (i) issuers — financial institutions that issue Visa-branded cards or payment products to account holders, and (ii) acquirers — financial institutions that contract with merchants to accept Visa-branded cards or payment products.

The issuers have the responsibility for issuing cards and other payment products, and determining the interest rates and fees paid by the account holders.

On purchase transactions, interchange reimbursement fees are paid by the acquirers to the issuers.

The acquirers are typically responsible for soliciting merchants, and establishing and earning these fees.

The transaction information is then transmitted

electronically to the acquirer and routed through VisaNet to the issuer for authorization.

Following authorization, a clearing file containing the final transaction data is submitted from the acquirer and processed for final settlement between the issuer and acquirer.

The following diagram illustrates the processing steps involved in a typical transaction on VisaNet.

| • | Service revenues consist of revenues earned for providing financial institution clients with support services for the delivery of Visa-branded payment products and solutions. Service revenues are primarily generated from payments volume on Visa-branded cards and payment products for purchased goods and services. |

| • | Data processing revenues consist of revenues earned for authorization, clearing, settlement, network access and other maintenance and support services that facilitate transaction and information processing among our clients globally and with Visa Europe. Data processing revenues are primarily generated from the number of transactions we process. |

| • | International transaction revenues consist of revenues earned for cross-border transaction processing and currency conversion activities. Cross-border transactions arise when the country of origin of the issuer is different from that of the merchant. International transaction revenues are primarily generated by cross-border payments and cash volume. |

| • | Client incentives consist of long-term contracts with financial institution clients and other business partners for various programs designed to build payments volume, increase Visa-branded card and product acceptance and win merchant routing transactions over our network. These incentives are primarily accounted for as reductions to operating revenues. |

U.S. dollar settlements with our financial institution clients are typically settled within the same day and do not result in a receivable or payable balance.

Settlement in currencies other than the U.S. dollar generally remain outstanding for one to two business days, resulting in amounts due from and to financial institution clients.

For the fiscal year ended September 30, [removed: 2015][added: 2016]

The aggregate market value of the registrant’s class A common stock, par value $0.0001 per share, held by non-affiliates (using the New York Stock Exchange closing price as of March 31, [removed: 2015,] [added: 2016,] the last business day of the registrant’s most recently completed second fiscal quarter) was approximately [removed: $128.2] [added: $145.5] billion.

As of November [removed: 13, 2015,] [added: 9, 2016,] there were [removed: 1,946,442,415] [added: 1,867,580,597] shares outstanding of the registrant’s class A common stock, par value $0.0001 per share, 245,513,385 shares outstanding of the registrant’s class B common stock, par value $0.0001 per share, and [removed: 19,587,524] [added: 16,814,896] shares outstanding of the registrant’s class C common stock, par value $0.0001 per share.

Such Proxy Statement will be filed with the Securities and Exchange Commission within 120 days of the Registrant’s fiscal year ended September 30, [removed: 2015.][added: 2016.]

| Item 1 | [removed: [Business](#s14DC467643F68340E1D7E1328B4E95B4)] [added: [Business](#sC718677AFAE45A64A01CF07E90CF5776)] | [removed: [5](#s14DC467643F68340E1D7E1328B4E95B4)] [added: [4](#sC718677AFAE45A64A01CF07E90CF5776)] |

| Item 1A | [Risk [removed: Factors](#s601AD1A6C6C8D9957442E1328B812B11)] [added: Factors](#sDC57D32ED14654849F274D9B2A777D13)] | [removed: [12](#s601AD1A6C6C8D9957442E1328B812B11)] [added: [14](#sDC57D32ED14654849F274D9B2A777D13)] |

| Item 1B | [Unresolved Staff [removed: Comments](#s26A6A4E4608D90061292E1328BB6E532)] [added: Comments](#sE20F009CFD085D6D89BBB6CF283C02A9)] | [removed: [28](#s26A6A4E4608D90061292E1328BB6E532)] [added: [25](#sE20F009CFD085D6D89BBB6CF283C02A9)] |

| Item 2 | [removed: [Properties](#sD82712D931F1E939D534E1328BD3D777)] [added: [Properties](#s934BD0E0A5D751069BA9CA9285061771)] | [removed: [28](#sD82712D931F1E939D534E1328BD3D777)] [added: [25](#s934BD0E0A5D751069BA9CA9285061771)] |

| Item 3 | [Legal [removed: Proceedings](#s9A0F30DB3C3DB41BFE64E1328BF6D8B5)] [added: Proceedings](#sF5256639FBD95AF9961EDE2544277B95)] | [removed: [28](#s9A0F30DB3C3DB41BFE64E1328BF6D8B5)] [added: [25](#sF5256639FBD95AF9961EDE2544277B95)] |

| Item 4 | [Mine Safety [removed: Disclosures](#s8D97D77BDA388D15D0F2E1328C28137E)] [added: Disclosures](#s3337F6991744599EB41915D348BB510B)] | [removed: [28](#s8D97D77BDA388D15D0F2E1328C28137E)] [added: [25](#s3337F6991744599EB41915D348BB510B)] |

| Item 5 | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#s183E07F77EA6F71C75CDE132799B4B29)] [added: Securities](#s0F99EBDE9DD25B3B9B2AD9CA832DDE36)] | [removed: [29](#s183E07F77EA6F71C75CDE132799B4B29)] [added: [26](#s0F99EBDE9DD25B3B9B2AD9CA832DDE36)] |

| Item 6 | [Selected Financial [removed: Data](#s445720CB44C0DF53696BE13278C684E5)] [added: Data](#s6A0F44B0924253B59FCCD5E249D6B2E4)] | [removed: [32](#s445720CB44C0DF53696BE13278C684E5)] [added: [29](#s6A0F44B0924253B59FCCD5E249D6B2E4)] |

| Item 7 | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#s240A77E5E62006FD9F38E1328CE2E113)] [added: Operations](#s19A76878BE5951E3A09C473251061254)] | [removed: [33](#s240A77E5E62006FD9F38E1328CE2E113)] [added: [30](#s19A76878BE5951E3A09C473251061254)] |

| Item 7A | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#s80080FED6520D1E849E5E1328E776083)] [added: Risk](#s9FA9561AB6575C94A800EA33BCE3C240)] | [removed: [51](#s80080FED6520D1E849E5E1328E776083)] [added: [48](#s9FA9561AB6575C94A800EA33BCE3C240)] |

| Item 8 | [Financial Statements and Supplementary [removed: Data](#sFA98547142534086BAF6E1328E90F0A4)] [added: Data](#sF25521DE980F5C9C9A59FD341D1882E3)] | [removed: [53](#sFA98547142534086BAF6E1328E90F0A4)] [added: [50](#sF25521DE980F5C9C9A59FD341D1882E3)] |

| Item 9 | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#sFEF85733494EF953CE72E13294CD3A82)] [added: Disclosure](#s8BD798A08E9A50A3BCFB5E713A0EF6AA)] | [removed: [112](#sFEF85733494EF953CE72E13294CD3A82)] [added: [120](#s8BD798A08E9A50A3BCFB5E713A0EF6AA)] |

| Item 9A | [Controls and [removed: Procedures](#sE0758D097B3D3B2E7325E13276F84A0B)] [added: Procedures](#sC0DF98E26BD159519F557FEC9E0D3418)] | [removed: [112](#sE0758D097B3D3B2E7325E13276F84A0B)] [added: [120](#sC0DF98E26BD159519F557FEC9E0D3418)] |

| Item 9B | [Other [removed: Information](#sC2E5CDD151836CD10254E132951165B5)] [added: Information](#sF39FEE47CFD050CFB9E6531784EF2147)] | [removed: [112](#sC2E5CDD151836CD10254E132951165B5)] [added: [121](#sF39FEE47CFD050CFB9E6531784EF2147)] |

| [PART [removed: III](#s513BFDBDD8754F0C0D69E13295564FA9)] [added: III](#s596CBD8F7C38507FB867D99A416C33F9)] | | |

| Item 10 | [Directors, Executive Officers and Corporate [removed: Governance](#s48B102C87135963E99E6E13295660045)] [added: Governance](#sDDDF9C9FAB855F7F98AAA6912DCEF324)] | [removed: [113](#s48B102C87135963E99E6E13295660045)] [added: [122](#sDDDF9C9FAB855F7F98AAA6912DCEF324)] |

| Item 11 | [Executive [removed: Compensation](#s16C4F9C6D510352C1540E13295996B12)] [added: Compensation](#s6EB6400F6B3653A7AA6477F9B480EC81)] | [removed: [113](#s16C4F9C6D510352C1540E13295996B12)] [added: [122](#s6EB6400F6B3653A7AA6477F9B480EC81)] |

| Item 12 | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#s083EB1BF0AF2C0756422E13295BA5FEB)] [added: Matters](#s948F7D97226756AB9BAA1084DCB71E89)] | [removed: [113](#s083EB1BF0AF2C0756422E13295BA5FEB)] [added: [122](#s948F7D97226756AB9BAA1084DCB71E89)] |

| Item 13 | [Certain Relationships and Related Transactions, and Director [removed: Independence](#sD4D86832A2549AE06B4AE13295ECAD4D)] [added: Independence](#sD49EDC745A915B11830BFBA3AECC7E9A)] | [removed: [113](#sD4D86832A2549AE06B4AE13295ECAD4D)] [added: [122](#sD49EDC745A915B11830BFBA3AECC7E9A)] |

| Item 14 | [Principal Accounting Fees and [removed: Services](#s2DF83DE79CAA3009FDCCE132960C5A8F)] [added: Services](#sC863C01D663C554E9CB6955CBDC14DC8)] | [removed: [113](#s2DF83DE79CAA3009FDCCE132960C5A8F)] [added: [122](#sC863C01D663C554E9CB6955CBDC14DC8)] |

| Item 15 | [removed: Exhibits,] [added: [Exhibits,] Financial Statement [removed: Schedules] [added: Schedules](#sD8601EB73A7456378E38C9819499B80F)] | [removed: [114](#s2D28EBFC73A30C894693E1329660EB97)] [added: [123](#sD8601EB73A7456378E38C9819499B80F)] |

Forward-looking statements generally are identified by words such as "believes," "estimates," "expects," "intends," "may," "projects," [removed: "could,"] [added: “could,"] "should," "will," [removed: "will continue"] [added: "continue"] and other similar expressions.

[removed: By their nature,] [added: All statements other than statements of historical fact could be] forward-looking [removed: statements: (i)] [added: statements, which] speak only as of the date they are [removed: made; (ii)] [added: made,] are not [removed: statements of historical fact or] guarantees of future [removed: performance;] [added: performance] and [removed: (iii)] are subject to [added: certain] risks, [removed: uncertainties, assumptions or changes in circumstances that] [added: uncertainties and other factors, many of which] are [added: beyond our control and are] difficult to [removed: predict or quantify.][added: predict.]

Except as required by law, we do not intend to update or revise any forward-looking statements as a result of new information, future [removed: developments] [added: events] or otherwise.

10-K 1 v093016.htm 10-K

| [PART I](#sCE13A98C4A0350A09E2E1E8BC3EC4806) | | |

| [PART II](#sB773E81184075C1F85C2CD107FAD61A8) | | |

| [PART IV](#s4BA2482D8AB656B1B1D084F595DE9E43) | | |

This Annual Report on Form 10-K contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 that relate to, among other things, our future operations, prospects, developments, strategies, growth of our business, integration of Visa Europe, anticipated expansion of our products in certain countries, plans to issue additional debt, industry developments, expectations regarding litigation, timing and amount of stock repurchases, sufficiency of sources of liquidity and funding, effectiveness of our risk management programs and expectations regarding the impact of recent accounting pronouncements on our consolidated financial statements.

We describe risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, any of these forward-looking statements in Item 1—Business, Item 1A—Risk Factors, Item 7—Management's Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this report.

10-K 1 v093015.htm FORM 10-K

| | |

| --- | --- |

| [PART I](#s1C1D8B74C3244E49B841E1328B2E4E90) | | |

| [PART II](#s6E771CA204A08A6C0019E1328C49FB29) | | |

| [PART IV](#s7C1E36751B1C999265F7E1329650F42E) | | |

This Annual Report on Form 10-K contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995.

Examples of forward-looking statements include, but are not limited to, statements we make about our revenue, client incentives, operating margin, tax rate, earnings per share, free cash flow, and the growth of those items.

Therefore, actual results could differ materially and adversely from our forward-looking statements due to a variety of factors, including the following:

| • | the impact of laws, regulations and marketplace barriers, including: |

| • | increased regulation of fees, transaction routing, payment card practices or other aspects of the payments industry in the United States, including new or revised regulations issued under the Dodd-Frank Wall Street Reform and Consumer Protection Act; |

| • | increased regulation in jurisdictions outside of the United States; |

| • | increased government support of national payments networks outside the United States; and |

| • | increased regulation of consumer privacy, data use and security; |

| • | developments in litigation and government enforcement, including those affecting interchange reimbursement fees, antitrust and tax; |

| • | new lawsuits, investigations or proceedings, or changes to our potential exposure in connection with pending lawsuits, investigations or proceedings; |

| • | economic factors, such as: |

| • | economic fragility in the Eurozone, the United States and in other advanced and emerging markets; |

| • | general economic, political and social conditions in mature and emerging markets globally; |

| • | general stock market fluctuations which may impact consumer spending; |

| • | material changes in cross-border activity, foreign exchange controls and fluctuations in currency exchange rates; and |

| • | material changes in our financial institution clients' performance compared to our estimates; |

| • | industry developments, such as competitive pressure, rapid technological developments and disintermediation from our payments network; |

| • | system developments, such as: |

| • | disruption of our transaction processing systems or the inability to process transactions efficiently; |

| • | account data breaches or increased fraudulent or other illegal activities involving Visa-branded cards or payment products; and |

| • | failure to maintain systems interoperability with Visa Europe; |

| • | the transaction with Visa Europe may not be consummated on the terms currently contemplated or at all; |

| • | Visa Europe's business may not be successfully integrated with our business or we may not achieve the anticipated benefits of the transaction; |

| • | the costs and risks associated with the transaction with Visa Europe, including risks relating to our ability to finance the transaction on reasonable terms or at all; |

| • | matters arising in connection with Visa Europe's or our efforts to comply with and satisfy applicable regulatory approvals and closing conditions relating to the transaction; |

| • | the loss of organizational effectiveness or key employees; |

| • | the failure to integrate acquisitions successfully or to effectively develop new products and businesses; |

| • | natural disasters, terrorist attacks, military or political conflicts, and public health emergencies; and |

| • | various other factors discussed throughout this report, including but not limited to, Item 1—Business, Item1A—Risk Factors and Item 7—Management's Discussion and Analysis of Financial Condition and Results of Operations. |

You should not place undue reliance on such statements.

At September 30, [removed: 2015,] [added: 2016,] we owned and leased approximately [removed: 3.3] [added: 3.9] million square feet of office and processing center space in [removed: 43] [added: 67] countries around the world, of which approximately [removed: 1.9] [added: 2.0] million square feet are owned and the remaining [removed: 1.4] [added: 1.9] million square feet are leased.

At November [removed: 13, 2015,] [added: 9, 2016,] we had [removed: 352] [added: 362] stockholders of record of our class A common stock.

| Fiscal [removed: 2014] [added: 2016] | High | | | | Low | | |

| First Quarter | $ | [removed: 55.68 | | | $ | 45.03] [added: 0.14] | |

| Second Quarter | $ | [removed: 58.88 | | | $ | 52.63] [added: 0.14] | |

| Third Quarter | $ | [removed: 54.54 | | | $ | 48.71] [added: 0.14] | |

| Fourth Quarter | $ | [removed: 56.19 | | | $ | 52.05] [added: 0.14] | |

There were [removed: 1,668] [added: 1,656] and [removed: 738] [added: 676] holders of record of our class B and class C common stock, respectively, as of November [removed: 13, 2015.][added: 9, 2016.]

During the fiscal years ended September 30, [removed: 2015] [added: 2016] and [removed: 2014,] [added: 2015,] we paid the following quarterly cash dividends per share of our class A common stock (determined in the case of class B and C common [added: stock and U.K.&I and Europe preferred] stock, on an as-converted basis) to all holders of record of our [removed: class A, B and C] common [removed: stock.][added: and preferred stock on the respective record dates.]

| Fiscal [removed: 2014] [added: 2016] | Dividend Per Share | | |

| First Quarter | $ | [removed: 0.10] [added: 81.01] | | [added: | $ | 68.36 | |]

| Second Quarter | $ | [removed: 0.10] [added: 77.00] | | [added: | $ | 66.12 | |]

| Third Quarter | $ | [removed: 0.10] [added: 81.73] | | [added: | $ | 73.25 | |]

| Fourth Quarter | $ | [removed: 0.10] [added: 83.79] | | [added: | $ | 73.83 | |]

Additionally, in October [removed: 2015,] [added: 2016,] our board of directors declared a quarterly cash dividend of [removed: $0.14] [added: $0.165] per share of class A common stock (determined in the case of class B and C common [removed: stock, on an as-converted basis) payable on December 1, 2015, to holders of record as of November 13, 2015 of our class A, B] [added: stock] and [removed: C common stock.][added: U.K.&I and Europe preferred]

Subject to legally available funds, we expect to continue paying quarterly cash dividends on our outstanding [removed: class A, B and C] common [added: and preferred] stock in the future.

The table below sets forth the [removed: information with respect to] [added: Company's] purchases of [removed: the Company’s] common stock [removed: made by or on behalf of the Company] during the quarter ended September 30, [removed: 2015.][added: 2016.]

| Period | | Total Number Of Shares Purchased (1) | | | Average Price Paid Per Share | | | | Total Number Of Shares Purchased As Part Of Publicly Announced Plans Or Programs [removed: (2)] [added: (2),(3)] | | | Approximate Dollar Value Of Shares That May Yet Be Purchased Under The Plans Or Programs (2),(3) | | |

| (1) | [removed: Represents] [added: Includes 24,248] shares of class A common stock withheld [added: at an average price of $78.23 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 [removed: shares as the Company did not repurchase additional shares under its share repurchase programs.] [added: shares.] |

| (3) | Our board of directors from time to time authorizes the repurchase of shares of our common stock up to a certain monetary limit. In October [removed: 2014] [added: 2015] and [removed: October 2015,] [added: July 2016,] our board of directors authorized share repurchase programs for $5.0 billion each. These authorizations have no expiration date. All share repurchase programs authorized prior to October [removed: 2014] [added: 2015] have been completed. |

The table below presents information as of September 30, [removed: 2015,] [added: 2016,] for the Visa 2007 Equity Incentive Compensation Plan (the "EIP") and the Visa Inc. Employee Stock Purchase Plan (the "ESPP"), which were approved by our stockholders.

We do not have any equity compensation plans that have not been approved by our [removed: stockholders, except as discussed in note (2) in the table below.][added: stockholders.]

| (1) | [added: Includes 8,876,484 outstanding options under the EIP and 344,905 outstanding purchase rights under the ESPP.] In [removed: addition to options,] [added: addition,] the EIP authorizes the issuance of restricted stock, restricted stock units, performance shares and other stock-based awards. The maximum number of shares issuable as of September 30, [removed: 2015,] [added: 2016,] pursuant to outstanding restricted stock units and performance shares, totals [removed: 1,442,522] [added: 3,146,954] and [removed: 1,263,962,] [added: 1,042,012,] respectively. |

| (3) | In January 2015, the Company's class A stockholders approved the ESPP which permits eligible employees to purchase shares of Class A common stock at a 15% discount [removed: of] [added: to] the stock price on the purchase date, subject to certain restrictions. See Note 16—Share-based Compensation to our consolidated financial statements included in Item 8—Financial Statements and Supplementary Data of this report. As of September 30, [removed: 2015, 154] [added: 2016, 152] million shares and [removed: 20] [added: 19] million shares were available for issuance under the EIP and the ESPP, respectively. |

stock on an as-converted basis) payable on December 6, 2016, to holders of record as of November 18, 2016 of our common and preferred stock.

| July 1-31, 2016 | | 2,597,645 | | | $ | 77.65 | | | 2,574,980 | | | $ | 7,122,065,457 | |

| August 1-31, 2016 | | 8,280,851 | | | $ | 79.85 | | | 8,279,268 | | | $ | 6,460,797,525 | |

| September 1-30, 2016 | | 9,648,865 | | | $ | 82.37 | | | 9,648,865 | | | $ | 5,665,815,457 | |

| Total | | 20,527,361 | | | $ | 80.76 | | | 20,503,113 | | | | | |

| Equity compensation plans approved by stockholders | 9,221,389 | | (1) | $ | 38.42 | | (2) | 170,655,889 | | (3) |

| (2) | Does not include 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. |

| July 1-31, 2015 | | 32,944 | | | $ | 75.75 | | | — | | | $ | 2,772,396,506 | |

| August 1-31, 2015 | | — | | | $ | — | | | — | | | $ | 2,772,396,506 | |

| September 1-30, 2015 | | — | | | $ | — | | | — | | | $ | 2,772,396,506 | |

| Total | | 32,944 | | | $ | 75.75 | | | — | | | | | |

| | | | | | | | | | | |

| Equity compensation plans approved by stockholders | 9,151,111 | | (1) | $ | 29.01 | | | 174,430,730 | | (3) |

| Equity compensation plans not approved by stockholders | 526,606 | | (2) | $ | 11.74 | | | — | | |

| Total | 9,677,717 | | | $ | 28.07 | | | 174,430,730 | | |

| (2) | These shares may be issued upon the exercise of options issued by Visa replacing certain CyberSource options outstanding at the time of the fiscal 2010 acquisition. These options were issued under certain provisions of the EIP, which permit Visa to issue options in connection with certain acquisition transactions. |

| Statement of Operations Data: | | [removed: 2015] [added: 2016] (1),(2) | | | | [removed: 2014 (1)] [added: 2015 (2),(3)] | | | | [removed: 2013 (1)] [added: 2014 (2),(4)] | | | | [removed: 2012 (3)] [added: 2013 (2)] | | | | [removed: 2011] [added: 2012 (5)] | | |

| Operating revenues | | $ | [removed: 13,880] [added: 15,082] | | | $ | [removed: 12,702] [added: 13,880] | | | $ | [removed: 11,778] [added: 12,702] | | | $ | [removed: 10,421] [added: 11,778] | | | $ | [removed: 9,188] [added: 10,421] | |

| Operating expenses | | $ | [removed: 4,816] [added: 7,199] | | | $ | [removed: 5,005] [added: 4,816] | | | $ | [removed: 4,539] [added: 5,005] | | | $ | [removed: 8,282] [added: 4,539] | | | $ | [removed: 3,732] [added: 8,282] | |

| Operating income | | $ | [removed: 9,064] [added: 7,883] | | | $ | [removed: 7,697] [added: 9,064] | | | $ | [removed: 7,239] [added: 7,697] | | | $ | [removed: 2,139] [added: 7,239] | | | $ | [removed: 5,456] [added: 2,139] | |

| Net income [removed: attributable to Visa Inc.] | | $ | [removed: 6,328] [added: 5,991] | | | $ | [removed: 5,438] [added: 6,328] | | | $ | [removed: 4,980] [added: 5,438] | | | $ | [removed: 2,144] [added: 4,980] | | | $ | [removed: 3,650] [added: 2,144] | |

| Basic earnings per share—class A common [removed: stock(4)] [added: stock(6)] | | $ | [removed: 2.58] [added: 2.49] | | | $ | [removed: 2.16] [added: 2.58] | | | $ | [removed: 1.90] [added: 2.16] | | | $ | [removed: 0.79] [added: 1.90] | | | $ | [removed: 1.29] [added: 0.79] | |

| Diluted earnings per share—class A common [removed: stock(4)] [added: stock(6)] | | $ | [removed: 2.58] [added: 2.48] | | | $ | [removed: 2.16] [added: 2.58] | | | $ | [removed: 1.90] [added: 2.16] | | | $ | [removed: 0.79] [added: 1.90] | | | $ | [removed: 1.29] [added: 0.79] | |

| Balance Sheet Data: | | [removed: 2015 (1),(2)] [added: 2016 (2)] | | | | [removed: 2014 (1)] [added: 2015 (2),(3)] | | | | [removed: 2013 (1)] [added: 2014 (2),(4)] | | | | [removed: 2012 (3)] [added: 2013 (2)] | | | | [removed: 2011] [added: 2012 (5)] | | |

| Accrued litigation | | $ | [removed: 1,024] [added: 981] | | | $ | [removed: 1,456] [added: 1,024] | | | $ | [removed: 5] [added: 1,456] | | | $ | [removed: 4,386] [added: 5] | | | $ | [removed: 425] [added: 4,386] | |

| Total equity | | $ | [removed: 29,842] [added: 32,912] | | | $ | [removed: 27,413] [added: 29,842] | | | $ | [removed: 26,870] [added: 27,413] | | | $ | [removed: 27,630] [added: 26,870] | | | $ | [removed: 26,437] [added: 27,630] | |

| Dividend declared and paid per common [removed: share(4)] [added: share(6)] | | $ | [removed: 0.48] [added: 0.56] | | | $ | [removed: 0.40] [added: 0.48] | | | $ | [removed: 0.33] [added: 0.40] | | | $ | [removed: 0.22] [added: 0.33] | | | $ | [removed: 0.15] [added: 0.22] | |

| [removed: (1)] [added: (2)] | During fiscal 2013, we made payments from the [added: 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 [removed: proceedings, which is subject to the adjudication of any appeals.] [added: 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 [added: 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. An additional accrual of $450 million associated with these opt-out claims was recorded in the fourth quarter of fiscal 2014. [removed: During fiscal 2015, payments] [added: Payments] totaling [removed: $426] [added: $528] million were made from [added: fiscal 2014 through 2016 from] the [added: U.S.] litigation escrow account reflecting settlements with a number of individual opt-out merchants, resulting in an accrued balance of [removed: $1.0 billion] [added: $978 million related to U.S. covered litigation] as of September 30, [removed: 2015.] [added: 2016.] See Note 3—U.S. [removed: Retrospective Responsibility Plan] and [removed: Potential Visa] Europe [removed: Liabilities] [added: Retrospective Responsibility Plans] and Note 20—Legal Matters to our consolidated financial statements included in Item 8—Financial Statements and Supplementary Data of this report. |

| [removed: (2)] [added: (3)] | During fiscal 2015, we recorded a tax benefit of $296 million resulting from the resolution of uncertain tax positions with taxing [removed: authorities in fiscal 2015,] [added: authorities,] of which $239 million relates to prior fiscal years. |

| [removed: (3)] [added: (5)] | During fiscal 2012, we recorded: a one-time, non-cash tax benefit of $208 million related to the remeasurement of our net deferred tax liabilities; a U.S. covered litigation provision of $4.1 billion and related tax benefits; and the reversal of previously recorded tax reserves and interest, which increased net income by $326 million. |

| [removed: (4)] [added: (6)] | The per share amounts for the prior periods presented have been retroactively adjusted to reflect the four-for-one stock split effected in the fiscal second quarter of 2015. |

| Total assets | | $ | 64,035 | | | $ | 39,367 | | | $ | 37,543 | | | $ | 35,495 | | | $ | 38,002 | |

| (1) | We did not include Visa Europe's financial results in our consolidated statement of operations from the acquisition date, June 21, 2016, through June 30, 2016 as the impact was immaterial. Our consolidated statement of operations for fiscal 2016 does include Visa Europe's financial results for the three months ended September 30, 2016. Further, our financial results for fiscal 2016 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. |

| (4) | During fiscal 2014, we recorded a $264 million tax benefit related to a deduction for U.S. domestic production activities, of which $191 million was a one-time tax benefit related to prior fiscal years. |

| | |

| --- | --- |

| | |

| --- | --- |

| Total assets | | $ | 40,236 | | | $ | 38,569 | | | $ | 35,956 | | | $ | 40,013 | | | $ | 34,760 | |

| As of September 30, [removed: 2015] [added: 2016] and [removed: 2014] [added: 2015] and for the years ended September 30, [removed: 2015, 2014] [added: 2016, 2015] and [removed: 2013] [added: 2014] | |

| [Report of Independent Registered Public Accounting [removed: Firm](#sE43255E1F9076780DD7BE1328EC1BD36)] [added: Firm](#sF88031272CFA5F83B8F79C7A1771943F)] | [removed: [54](#sE43255E1F9076780DD7BE1328EC1BD36)] [added: [51](#sF88031272CFA5F83B8F79C7A1771943F)] |

| [Consolidated Balance [removed: Sheets](#s25A5A38C8ED26322143EE1327164C4C1)] [added: Sheets](#s2530685B56355F5F8B46A4E7DEDA35FD)] | [removed: [55](#s25A5A38C8ED26322143EE1327164C4C1)] [added: [52](#s2530685B56355F5F8B46A4E7DEDA35FD)] |

| [Consolidated Statements of [removed: Operations](#sDF51CE3577FED2A0B873E132735AF517)] [added: Operations](#s701008CD8B3B5C0EB894330418136BE9)] | [removed: [57](#sDF51CE3577FED2A0B873E132735AF517)] [added: [54](#s701008CD8B3B5C0EB894330418136BE9)] |

| [Consolidated Statements of Comprehensive [removed: Income](#s075D99C7C5EEF8D4ECEEE13270463BE8)] [added: Income](#sFD610D49F642523E866E3515965842AC)] | [removed: [59](#s075D99C7C5EEF8D4ECEEE13270463BE8)] [added: [56](#sFD610D49F642523E866E3515965842AC)] |

| [Consolidated Statements of Changes in [removed: Equity](#sF729E45E3A678146CAB2E132700B47D2)] [added: Equity](#s4B08FE6C24AF5FB8A22D557F6B3E1586)] | [removed: [60](#sF729E45E3A678146CAB2E132700B47D2)] [added: [57](#s4B08FE6C24AF5FB8A22D557F6B3E1586)] |

| [Consolidated Statements of Cash [removed: Flows](#sF6FC8B304B35DAD73309E13271488C15)] [added: Flows](#sB5C987FBECF358C3842FA480D80DF2DA)] | [removed: [63](#sF6FC8B304B35DAD73309E13271488C15)] [added: [60](#sB5C987FBECF358C3842FA480D80DF2DA)] |

| [Notes to the Consolidated Financial [removed: Statements](#s93F94DA594A757631745E1327484E4F1)] [added: Statements](#s6291DD9DFAA6583D87FB82DD260EA16E)] | [removed: [65](#s93F94DA594A757631745E1327484E4F1)] [added: [62](#s6291DD9DFAA6583D87FB82DD260EA16E)] |

We have audited the accompanying consolidated balance sheets of Visa Inc. and subsidiaries as of September 30, [removed: 2015] [added: 2016] and [removed: 2014,] [added: 2015,] and the related consolidated statements of operations, comprehensive income, changes in equity, and cash flows for each of the years in the three-year period ended September 30, [removed: 2015.][added: 2016.]

We also have audited Visa Inc.’s internal control over financial reporting as of September 30, [removed: 2015,] [added: 2016,] based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Visa Inc. and subsidiaries as of September 30, [removed: 2015] [added: 2016] and [removed: 2014,] [added: 2015,] and the results of their operations and their cash flows for each of the years in the three-year period ended September 30, [removed: 2015,] [added: 2016,] in conformity with U.S. generally accepted accounting principles.

Also in our opinion, Visa Inc. maintained, in all material respects, effective internal control over financial reporting as of September 30, [removed: 2015,] [added: 2016,] based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

| | September 30, [removed: 2015] [added: 2016] | | | | September 30, [removed: 2014] [added: 2015] | | |

| Cash and cash equivalents | $ | [removed: 3,518] [added: 5,619] | | | $ | [removed: 1,971] [added: 3,518] | |

| Restricted [removed: cash—litigation] [added: cash—U.S. litigation] escrow (Note 3) | [removed: 1,072] [added: 1,027] | | | | [removed: 1,498] [added: 1,072] | | |

| Trading | [removed: 66] [added: 71] | | | | [removed: 69] [added: 66] | | |

| Available-for-sale | [removed: 2,431] [added: 3,248] | | | | [removed: 1,910] [added: 2,431] | | |

| Settlement receivable | [removed: 408] [added: 1,467] | | | | [removed: 786] [added: 408] | | |

| Accounts receivable | [removed: 847] [added: 1,041] | | | | [removed: 822] [added: 847] | | |

| Customer collateral (Note 11) | [removed: 1,023] [added: 1,001] | | | | [removed: 961] [added: 1,023] | | |

| Current portion of client incentives | [removed: 303] [added: 284] | | | | [removed: 210] [added: 303] | | |

| Prepaid expenses and other current assets (Note 5) | [removed: 353] [added: 555] | | | | [removed: 307] [added: 353] | | |

| Total current assets | [removed: 10,892] [added: 14,313] | | | | [removed: 9,562] [added: 10,021] | | |

| Investment securities, available-for-sale (Note 4) | [removed: 3,384] [added: 3,931] | | | | [removed: 3,015] [added: 3,384] | | |

| Client incentives | [removed: 110] [added: 448] | | | | [removed: 81] [added: 110] | | |

| Property, equipment and technology, net (Note 6) | [removed: 1,888] [added: 2,150] | | | | [removed: 1,892] [added: 1,888] | | |

| Other assets (Note 5) | [removed: 776] [added: 893] | | | | [removed: 855] [added: 778] | | |

| Intangible assets, net (Note 7) | [removed: 11,361] [added: 27,234] | | | | [removed: 11,411] [added: 11,361] | | |

| Goodwill [removed: (Note 7)] | [removed: 11,825] [added: 15,066] | | | | [removed: 11,753] [added: 11,825] | | |

| Accounts payable | $ | [removed: 127] [added: 203] | | | $ | [removed: 147] [added: 127] | |

| Settlement payable | [removed: 780] [added: 2,084] | | | | [removed: 1,332] [added: 780] | | |

| Accrued compensation and benefits | [removed: 503] [added: 673] | | | | [removed: 450] [added: 503] | | |

| Client incentives | [removed: 1,049] [added: 1,976] | | | | [removed: 1,036] [added: 1,049] | | |

| Accrued liabilities (Note 8) | [removed: 868] [added: 1,128] | | | | [removed: 624] [added: 849] | | |

| Accrued litigation (Note 20) | [removed: 1,024] [added: 981] | | | | [removed: 1,456] [added: 1,024] | | |

| Total current liabilities | [removed: 5,374] [added: 8,046] | | | | [removed: 6,006] [added: 5,355] | | |

| Deferred tax liabilities (Note 19) | [removed: 4,123] [added: 4,808] | | | | [removed: 4,145] [added: 3,273] | | |

| Other liabilities (Note 8) | [removed: 897] [added: 1,162] | | | | [removed: 1,005] [added: 897] | | |

| Preferred stock, $0.0001 par value, 25 shares authorized and [removed: none] [added: 5] issued [added: and outstanding as follows:] | [removed: $] | [removed: —] | | | [removed: $] | [removed: —] | |

| Class A common stock, $0.0001 par value, 2,001,622 shares authorized, [removed: 1,950] [added: 1,871] and [removed: 1,978] [added: 1,950] shares issued and outstanding at September 30, [removed: 2015] [added: 2016] and [removed: 2014,] [added: 2015,] respectively (Note 14) | — | | | | — | | |

Visa Inc. acquired Visa Europe during 2016, and management excluded from its assessment of the effectiveness of Visa Inc.’s internal control over financial reporting as of September 30, 2016, Visa Europe's internal control over financial reporting associated with 7% of total assets and 4% of net operating revenue included in the consolidated financial statements of Visa Inc. and subsidiaries as of and for the year ended September 30, 2016.

Our audit of internal control over financial reporting of Visa Inc. also excluded an evaluation of the internal control over financial reporting of Visa Europe.

| Total assets | $ | 64,035 | | | $ | 39,367 | |

| Customer collateral (Note 11) | 1,001 | | | | 1,023 | | |

| Long-term debt (Note 9) | 15,882 | | | | — | | |

| Deferred purchase consideration (Note 2) | 1,225 | | | | — | | |

| Total liabilities | 31,123 | | | | 9,525 | | |

| Series A convertible participating preferred stock, none issued (Note 2 and Note 14) | $ | — | | | $ | — | |

| Series B convertible participating preferred stock, 2 shares issued and outstanding at September 30, 2016 (Note 2 and Note 14) | 2,516 | | | | — | | |

| Series C convertible participating preferred stock, 3 shares issued and outstanding at September 30, 2016 (Note 2 and Note 14) | 3,201 | | | | — | | |

| Treasury stock (Note 2 and Note 14) | (170 | | ) | | — | | |

| Right to recover for covered losses (Note 3) | (34 | | ) | | — | | |

| Visa Europe Framework Agreement loss (Note 2) | 1,877 | | | | — | | | | — | | |

| Interest expense | (427 | | ) | | (3 | | ) | | (8 | | ) |

| Other (Note 4 and Note 12) | 556 | | | | (66 | | ) | | 35 | | |

| Non-operating income (expense) | 129 | | | | (69 | | ) | | 27 | | |

| (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—Acquisition of Visa Europe. |

| (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—Acquisition of Visa Europe. |

| Net income | $ | 5,991 | | | $ | 6,328 | | | $ | 5,438 | |

| | Common Stock | | | | | | | | | Additional Paid-In Capital | | | | Accumulated Income | | | | Accumulated Other Comprehensive Loss | | | | Total Equity | | |

| (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 | | |

| Balance as of September 30, 2015 | — | | | — | | | 1,950 | | | 245 | | | 20 | | | $ | — | | | $ | — | | | $ | — | | | $ | 18,073 | | | $ | 11,843 | | | $ | (74 | ) | | $ | 29,842 | |

| Issuance of preferred stock (Note 2 and Note 14) | 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 2 and Note 14) | | | | | | | | | | | | | (1 | ) | | | | | | (170 | | ) | | | | | | | | | | | | | | | | | | (170 | | ) |

| Repurchase of class A common stock (Note 14) | | | | | | | (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 U.K.&I and Europe preferred stock, respectively. |

| Net income | $ | 5,991 | | | $ | 6,328 | | | $ | 5,438 | |

| Right to recover for covered losses recorded in equity | (9 | | ) | | — | | | | — | | |

| Litigation provision (Note 20) | 4 | | | | 14 | | | | 453 | | |

| Treasury stock—class C common stock (Note 2) | (170 | | ) | | — | | | | — | | |

| Proceeds from issuance of senior notes (Note 9) | 15,971 | | | | — | | | | — | | |

| Debt issuance costs (Note 9) | (98 | | ) | | — | | | | — | | |

| Series B and C convertible participating preferred stock issued in Visa Europe acquisition (Note 2) | $ | 5,717 | | | $ | — | | | $ | — | |

| Deferred purchase consideration recorded for Visa Europe acquisition (Note 2) | $ | 1,236 | | | $ | — | | | $ | — | |

November 19, 2015

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| Deferred tax assets (Note 19) | 871 | | | | 1,028 | | |

| Total assets | $ | 40,236 | | | $ | 38,569 | |

| Total liabilities | 10,394 | | | | 11,156 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Balance as of September 30, 2012 | 2,139 | | | 245 | | | 31 | | | $ | 19,992 | | | $ | 7,809 | | | $ | (171 | ) | | $ | 27,630 | |

| Repurchase of class A common stock | (132 | ) | | | | | | | | (1,414 | | ) | | (3,951 | | ) | | | | | | (5,365 | | ) |

| Balance as of September 30, 2013 | 2,031 | | | 245 | | | 27 | | | $ | 18,875 | | | $ | 7,974 | | | $ | 21 | | | $ | 26,870 | |

| Payments for earn-out related to PlaySpan acquisition | — | | | | — | | | | (12 | | ) |

| Principal payments on capital lease obligations | — | | | | — | | | | (6 | | ) |

Visa provides a wide variety of payment solutions that support payment products that issuers can offer to their account holders: pay now with debit, pay ahead with prepaid or pay later with credit products.

These services facilitate transactions on Visa's network among account holders, merchants, financial institutions and governments in mature and emerging markets globally.

Beginning in fiscal 2015, current income tax receivable is included in the prepaid expenses and other current assets line.

The Company has not presented required separate disclosures because its gross unrealized loss positions in debt or equity securities for the periods presented are not material.

The equity method of accounting is also used for flow-through entities such as limited partnerships

materially from the Company's estimates.

Service revenues consist of revenues earned for providing financial institution clients with support services for the delivery of Visa-branded payment products and solutions.

discount rate and the expected rate of return on plan assets (for qualified pension plans).

The discount rate is based on a "bond duration matching" methodology, which reflects the matching of projected plan obligation cash flows to an average of high-quality corporate bond yield curves whose duration matches the projected cash flows.

For certain foreign operations, the Company's functional currency may be the local currency in which a foreign subsidiary executes its business transactions.

Fair value represents the difference in the value of the derivative instruments at the contractual rate and the value at current market rates, and generally reflects the estimated amounts that the Company would receive or pay to terminate the contracts at the reporting date based on broker quotes for the same or similar instruments.

The Company does not enter into derivative contracts for speculative or trading purposes.

The Company indemnifies Visa Europe for claims arising from the Company’s or Visa Europe’s activities that are brought outside of Visa Europe’s region, as described in Note 2—Visa Europe.

Compensation cost for

In February 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2013-04, which provides guidance for the recognition, measurement and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date.

In March 2013, the FASB issued ASU 2013-05, which clarifies the applicable guidance for the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity, or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity.

In July 2013, the FASB issued ASU 2013-11, which provides guidance for the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward exists.

effective October 1, 2016.

On November 2, 2015, the Company and Visa Europe entered into a transaction agreement, pursuant to which the Company and Visa Europe agreed on the terms and conditions of the Company’s acquisition of 100% of the share capital of Visa Europe for a total purchase price of up to €21.2 billion.

The purchase price consists of: (a) at the closing of the transaction, up-front cash consideration of €11.5 billion and preferred stock of the Company convertible upon certain conditions into class A common stock or class A equivalent preferred stock of the Company, as described below, valued at approximately €5.0 billion, and (b) following the end of sixteen fiscal quarters post-closing, contingent cash consideration of up to €4.0 billion (plus up to an additional €0.7 billion in interest), determined based on the achievement of specified net revenue levels during such post-closing period.

The board of directors of the Company and Visa Europe have each unanimously supported the transaction agreement and the matters contemplated thereby.

Closing is subject to regulatory approvals and other customary conditions, and is currently expected to occur in the fiscal third quarter of 2016.

Transaction agreement and option amendment.

The transaction agreement provides for the acquisition to be effected pursuant to the exercise of the amended Visa Europe put option, as described further below.

In connection with the execution of the transaction agreement, the Company and Visa Europe have amended the Visa Europe put option to align the terms on which Visa Europe may exercise its rights under the put option agreement with the terms of the transaction agreement, including the economic terms and timing.

The transaction agreement prohibits Visa Europe from exercising the put option prior to closing of the transaction and, if the transaction agreement is terminated without completion of the acquisition, the Visa Europe put option will revert to its original, unamended form.

The transaction agreement may be terminated by the Company or Visa Europe, subject to specified exceptions, if the transaction is not consummated by August 2, 2016, or if legal restraints that prohibit the closing have become final and non-appealable.

Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of September 30, [removed: 2015,] [added: 2016,] our disclosure controls and procedures were effective, at the reasonable assurance level.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of September 30, [removed: 2015.][added: 2016.]

Based on management’s assessment, management has concluded that the Company’s internal control over financial reporting was effective as of September 30, [removed: 2015] [added: 2016] using the criteria set forth in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).

The effectiveness of our internal control over financial reporting as of September 30, [removed: 2015,] [added: 2016,] has been audited by KPMG LLP, an independent registered public accounting firm and is included in Item 8 of this report.

During fiscal [removed: 2015,] [added: 2016,] there were no significant changes in our internal controls over financial reporting that occurred during the year ended September 30, [removed: 2015,] [added: 2016,] that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

On June 21, 2016, we acquired Visa Europe Limited ("Visa Europe").

Management has excluded the acquired business from its assessment of the effectiveness of disclosure controls and procedures as of September 30, 2016.

Management expects to include Visa Europe in its assessment of the effectiveness of disclosure controls and procedures beginning in fiscal year 2017.

Management has excluded Visa Europe from its assessment of the effectiveness of internal control over financial reporting as its acquisition was completed in the last half of fiscal year 2016 on June 21, 2016.

Visa Europe represented 4% of net operating revenue for the fiscal year ended September 30, 2016, and 7% of total assets at September 30, 2016, after excluding goodwill and intangible assets recorded upon Visa Europe's acquisition.

The recognition of goodwill and intangible assets is covered by our internal controls over mergers and acquisitions, which were included in management's assessment of the effectiveness of the Company's internal control over financial reporting for the fiscal year ended September 30, 2016.

Management expects to include Visa Europe in its assessment of internal control over financial reporting beginning in fiscal year 2017.

See Note 2—Acquisition of Visa Europe to our consolidated financial statements included in Item 8—Financial Statements and Supplementary Data of this report for pro forma information.

Certain information required by Part III is omitted from this Report and the Company will file a definitive proxy statement pursuant to Regulation 14A under the Exchange Act (the “Proxy Statement”) not later than 120 days after the end of the fiscal year ended September 30, [removed: 2015,] [added: 2016,] and certain information included therein is incorporated herein by reference.

The information required by this item concerning the Company's directors, executive officers, the Code of Business Conduct and Ethics and corporate governance matters is incorporated herein by reference to the sections entitled “Director Nominee Biographies,” “Executive [removed: Officers,”] [added: Officers” and] “Corporate Governance” [removed: and “Committees of the Board of Directors”] in our Proxy Statement.

Our Code of Business Conduct and Ethics, Code of Ethics for Senior Financial Officers and our Corporate Governance Guidelines are available on the Investor Relations page of our website at http://investor.visa.com, under “Corporate Governance.” Printed copies of these documents are also available to stockholders without charge upon written request directed to Corporate Secretary, Visa Inc., P.O. Box [removed: 8999,] [added: 193243,] San Francisco, California [removed: 94128-8999.][added: 94119.]

| Date: | | November [removed: 19, 2015] [added: 15, 2016] |

| /s/ Charles W. Scharf | | Chief Executive Officer and Director | | November [removed: 19, 2015] [added: 15, 2016] |

| /s/ Vasant M. Prabhu | | Chief Financial Officer | | November [removed: 19, 2015] [added: 15, 2016] |

| Vasant M. Prabhu | | [removed: (principal financial officer and principal accounting officer)] [added: (Principal Financial Officer)] | | |

| /s/ Robert W. Matschullat | | Independent Chair | | November [removed: 19, 2015] [added: 15, 2016] |

| /s/ Lloyd A. Carney | | Director | | November [removed: 19, 2015] [added: 15, 2016] |

| /s/ Mary B. Cranston | | Director | | November [removed: 19, 2015] [added: 15, 2016] |

| /s/ Francisco Javier Fernández-Carbajal | | Director | | November [removed: 19, 2015] [added: 15, 2016] |

| /s/ Alfred F. Kelly, Jr. | | Director [added: and Chief Executive Officer] | | November [removed: 19, 2015] [added: 15, 2016] |

| Alfred F. Kelly, Jr. | | [added: Designate] | | |

| /s/ Cathy E. Minehan | | Director | | November [removed: 19, 2015] [added: 15, 2016] |

| /s/ Suzanne Nora Johnson | | Director | | November [removed: 19, 2015] [added: 15, 2016] |

| /s/ David J. Pang | | Director | | November [removed: 19, 2015] [added: 15, 2016] |

| /s/ John A. C. Swainson | | Director | | November [removed: 19, 2015] [added: 15, 2016] |

| /s/ Maynard G. Webb, Jr. | | Director | | November [removed: 19, 2015] [added: 15, 2016] |

| 2.1 | | [added: Amended and Restated] Transaction Agreement, dated as of [removed: November 2, 2015,] [added: May 10, 2016,] between Visa Inc. and Visa Europe Limited # | | 8-K | | 001-33977 | | 2.1 | | [removed: 11/2/2015] [added: 5/10/2016] |

| [removed: 3.3+] [added: 3.3] | | Amended and Restated Bylaws of Visa Inc. | | [added: 10-K] | | [added: 001-33977] | | [added: 3.3] | | [added: 11/20/2015] |

| [removed: 4.5] [added: 4.11] | | [removed: Form of certificate] [added: Certificate] of [removed: designations] [added: Designations] of [removed: series] [added: Series] A [removed: convertible participating preferred stock] [added: Convertible Participating Preferred Stock] of Visa Inc. | | 8-K | | 001-33977 | | 3.1 | | [removed: 11/2/2015] [added: 6/21/2016] |