Visa (V) 10-K risk factor changes: FY2017 vs FY2016

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

In the [removed: U.S.] [added: United States] and many other jurisdictions, we have historically set default interchange reimbursement fees.

Even though we generally do not receive any revenue related to interchange reimbursement fees in a [removed: purchase] [added: payment] transaction (those fees are paid by the acquirers to the 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.

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

For example, [removed: in 2011, in accordance with] the U.S. [removed: Dodd-Frank Act, the U.S.] Federal Reserve [removed: capped] [added: caps] the maximum U.S. debit interchange reimbursement rate received by large financial institutions at 21 cents plus 5 basis [removed: points,] [added: points per transaction,] plus a possible fraud adjustment of 1 cent.

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

[removed: In 2015, the E.U.’s] [added: The EU’s] IFR [removed: placed] [added: places] an effective cap on consumer credit and consumer debit interchange fees for both domestic and [removed: cross border] [added: cross-border] transactions [added: within Europe] (30 basis points and 20 basis points, [removed: respectively), significantly reducing the fees received by E.U. issuers.][added: respectively).]

[removed: E.U. Member States] [added: EU member states] have the ability to further restrict these interchange levels within their territories.

For example, government regulations or pressure may require [removed: or] [added: us to] allow other [added: payments] networks to [removed: be supported by] [added: support] Visa products or [removed: services] [added: services,] or to have the other network's functionality or brand marks on our products.

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

[removed: 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, [removed: capital] [added: 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 [removed: locally.][added: locally, as well as localized risk management or governance.]

Increased central bank oversight could also lead to new or different criteria for [removed: financial institution] participation [removed: in,] [added: in] and access to our payments [removed: system.][added: system, including allowing non-traditional financial technology companies to act as issuers or acquirers.]

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

Additionally, regulation in an individual country could [removed: continue and] expand.

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

We believe some issuers may react to such regulations by charging new or higher [removed: fees] [added: fees, or reducing certain benefits] to consumers, [removed: making] [added: which make] our products less appealing to consumers.

Some acquirers may elect to charge higher merchant discount rates regardless of the Visa interchange reimbursement rate, causing merchants not to accept our products or to steer customers to alternate [added: payments systems or forms of payment.]

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

For these reasons, increased global regulation of the payments industry may make our products less desirable, diminish our ability to compete, reduce our transaction [removed: volumes] [added: volumes,] and harm our business.

Government-imposed restrictions on payment systems may prevent us from competing against providers in certain [removed: countries.][added: countries, including significant markets such as China and Russia.]

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

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

[removed: Due] [added: Furthermore, due] to our inability to [removed: oversee] [added: manage] the end-to-end processing of transactions for cards [removed: carrying our brands] in [removed: these] [added: certain] countries, we depend on our close working relationships with our clients or [removed: third party] [added: third-party] processors [removed: in these regions] to ensure transactions involving our products are processed effectively.

[removed: National] [added: In general, national] laws that protect domestic processing may increase our [removed: costs,] [added: costs;] decrease [added: our payments volumes and impact] the [added: revenue we generate in those countries; decrease the] number of Visa products issued or [removed: processed,] [added: processed;] impede us from utilizing our global processing capabilities and [removed: control] [added: controlling] the quality of the services supporting our [removed: brands,] [added: brands;] restrict our [removed: activities,] [added: activities; limit our growth and the ability to introduce new products, services and innovations;] force us to leave countries or prevent us from entering new [removed: markets,] [added: markets; and create new competitors,] all of which could harm our [removed: ability to operate our business, maintain or increase our revenues globally and extend our global brands.][added: business.]

The impact of these regulations on [removed: us (and on] [added: us,] our [removed: clients] [added: clients,] and other third [removed: parties)] [added: parties] could limit our ability to enforce our payments system [removed: rules or] [added: rules;] require us to adopt new rules or change existing [removed: rules, and it may] [added: rules; affect our existing contractual arrangements;] increase our compliance [removed: costs] [added: costs; require us to make our technology or intellectual property available to third parties, including competitors, in an undesirable manner;] and reduce our revenue opportunities.

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

Complying with these and other regulations increases our costs and [removed: can] [added: could] reduce our revenue opportunities.

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

Our compliance programs and policies are designed to support our compliance with a wide array of regulations and laws, [added: such as anti-money laundering, sanctions] and [added: anti-corruption, and] we continually enhance our compliance programs as regulations evolve.

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 penalties, [removed: litigation] [added: litigation, investigations] and [added: proceedings, and] damage to our global brands and reputation.

Furthermore, the evolving and increased regulatory focus on the payments industry could [added: negatively impact or] reduce the number of Visa products our clients issue, the volume of payments we [removed: process and] [added: process,] our [removed: revenue; negatively impact] [added: revenues,] our [removed: brands and] [added: brands,] our competitive [removed: positioning;] [added: positioning, our ability to use our intellectual property to differentiate our products] and [removed: limit] [added: services,] the [added: quality and] types of products and services [removed: that] we offer, the countries in which our products are [removed: used] [added: used,] and the types of [removed: customers] [added: consumers] and merchants who can obtain or accept our products, all of which could harm our business.

We may be subject to tax examinations or disputes, or changes in [removed: the] tax laws.

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

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

See also Note [removed: 19—Income] [added: 18—Income] Taxes to our consolidated financial statements included in Item [removed: 8] [added: 8—Financial Statements and Supplementary Data] of this report.

We are involved in numerous [added: litigation matters, investigations, and proceedings asserted by] civil [removed: actions] [added: litigants, governments,] and [removed: government investigations] [added: enforcement bodies] alleging violations of competition and antitrust law, consumer protection [removed: law] [added: law,] and intellectual property law, among [removed: others.][added: others (these are referred to as "actions" in this section).]

[removed: Legal and regulatory proceedings and investigations] [added: These actions] are inherently uncertain, [removed: expensive] [added: expensive,] and disruptive to our operations.

In the event we are found liable in any material [removed: litigation, proceedings or investigations,] [added: action,] particularly in a large class action lawsuit or an antitrust claim entitling the plaintiff to treble damages, [added: or arising from a government investigation,] we may be required to pay significant [removed: awards] [added: awards, settlements,] or [removed: settlements.][added: fines.]

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

More recently, in March 2017, Argentina's central bank passed regulations that cap interchange fees on credit and debit transactions.

We are also subject to central bank oversight in some markets, including the United Kingdom and within the European Union.

Governments in a number of jurisdictions shield domestic payment card networks, brands, and processors from international competition by imposing market access barriers and preferential domestic regulations.

To varying degrees, these policies and regulations affect the terms of competition in the marketplace and undermine the competitiveness of international payments networks.

In Russia, legislation effectively prevents us from processing domestic transactions.

The central bank controlled national payment card system (NSPK) is the only entity allowed to process domestically.

Although we have filed an application with the People's Bank of China (PBOC) to operate a Bank Card Clearing Institution (BCCI) in China, the timing and the procedural steps remain uncertain.

The approval process might require several years, and there is no guarantee that the license to operate a BCCI will be approved or, if we obtain such license, that we will be able to successfully compete with domestic payments networks.

Our ability to do so may be adversely affected by regulatory requirements and policies pertaining to transaction routing or on-shore processing.

Co-badging and co-residency regulations may pose additional challenges in markets where Visa competes with national schemes for issuance and routing.

For example, in China, certain banks have issued dual-branded cards for which domestic transactions in China are processed by UnionPay and transactions outside of China are processed by us or other international payments networks.

The PBOC is contemplating that dual-branded cards could be phased out over time as new licenses are issued to international companies to participate in China’s domestic payments market.

Accordingly, we have been working with Chinese issuers to issue Visa-only branded cards for international travel, and later for domestic transactions after we obtain a BCCI license.

However, notwithstanding such efforts, the phase out of dual-branded cards may decrease our payment volumes and impact the revenue we generate in China.

Mir and UnionPay have grown rapidly in Russia and China, respectively, and are actively pursuing international expansion plans.

Although regulatory barriers shield Mir and UnionPay from competition in Russia and China, respectively, alternate payment providers such as Alipay and WeChat Pay have rapidly expanded into e-commerce, offline, and cross-border payments, which could make it difficult for us to compete even if our license is approved in China.

Earlier this year, with strong backing from China’s government, a new digital transaction routing system known as Netlink was established.

The PBOC allowed Alipay and other digital payment providers to invest in Netlink.

It and other such systems could have a competitive advantage in comparison with other international payments networks.

Laws and regulations regarding the handling of personal data and information may impede our services or result in increased costs, legal claims, or fines against us.

Our business relies on the processing of data in many jurisdictions and the movement of data across national borders.

Legal requirements relating to the collection, storage, handling, use, disclosure, transfer, and security of personal data continue to evolve, and regulatory scrutiny in this area is increasing around the world.

Significant uncertainty exists as privacy and data protection laws may be interpreted and applied differently from country to country and may create inconsistent or conflicting requirements.

For example, the GDPR, which becomes effective in May 2018, extends the scope of the EU data protection law to all companies processing data of EU residents, regardless of the company’s location.

The law requires companies to meet new requirements regarding the handling of personal data, including new rights such as the “portability” of personal data.

Although we have an extensive program underway to address GDPR requirements, our efforts to comply with GDPR and other privacy and data protection laws may entail substantial expenses, may divert resources from other initiatives and projects, and could limit the services we are able to offer.

Furthermore, enforcement actions and investigations by regulatory authorities related to data security incidents and privacy violations continue to increase.

The enactment of more restrictive laws, rules, regulations, or future enforcement actions or investigations could impact us through increased costs or restrictions on our business, and noncompliance could result in regulatory penalties and significant legal liability.

Details of the most significant actions we face are described more fully in Note 19—Legal Matters to our consolidated financial statements included in Item 8—Financial Statements and Supplementary Data of this report.

The outcome of these actions may also influence regulators, investigators, governments, or civil litigants in the same or other jurisdictions, which may lead to the assertion of additional actions against Visa.

Moreover, even if we successfully adapt to technological change and the proliferation of alternative types of payment services by developing and offering our own services in these areas, such services may provide less favorable financial terms for us than we currently receive from VisaNet transactions, which could hurt our financial results and prospects.

Some policymakers have called upon U.S. competition authorities to consider potential

We may not succeed in addressing consumer confusion and brand disintermediation due to the challenges of evolving digital form factors and ecommerce technologies.

In addition, almost half of our operating revenues are earned outside the United States.

Geopolitical trends towards nationalism, protectionism, and restrictive visa requirements, as well as continued activity and uncertainty around economic sanctions could also reduce cross-border travel and spend.

In March 2017, the UK government initiated the exit process under Article 50 of the Treaty of the European Union, commencing a period of up to two years for the United Kingdom and the other EU member states to negotiate the terms of the withdrawal.

Brexit could lead to legal uncertainty and potentially divergent national laws and regulations in the United Kingdom and European Union.

If we or our partners fail to adapt or keep pace with new technologies in the payments

Because the techniques used to obtain unauthorized access, or to disable or degrade systems change frequently, have become increasingly more complex and sophisticated, and may be difficult to detect for periods of time, we may not anticipate these acts or respond adequately or timely.

As these threats continue to evolve and increase, we may be required to devote significant additional resources in order to modify and enhance our security controls and to identify and remediate any security vulnerabilities.

This amounted to a significant reduction in the average system-wide interchange reimbursement fees received by large issuers.

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.

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.

See Note 20—Legal Matters of this report.

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.

Though the Chinese State Council has announced that international schemes, such as 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, the full implementation guidelines for BCCI’s have yet to be finalized.

In Russia, legislation has effectively prevented us from processing in the domestic market and mandated that we migrate our domestic processing business to the state-owned NSPK (or national payment card system), which is the only entity allowed to process domestically.

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

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

regulatory, technological and other developments.

| | |

| --- | --- |

| • | competitors, clients and others may develop methods to use our payment credentials, tokens and technologies to compete with, impair or replace digital payment products that use and support our network and processing over our network; |

| • | new players and intermediaries in the payments value chain may redirect transactions or steer participants away from our network; |

| • | we may face increasing risk of others asserting their intellectual property rights and potential litigation, as market entrants include technology companies and companies from industries where patent rights are actively asserted; |

Some

These events could also reduce cross-border travel and spend, which impacts our international transaction revenues, which are generated by processing cross-border payments and cash volume transactions, as well as from foreign currency exchange transactions.

Any

The U.K. government is working towards triggering Article 50 of the Lisbon Treaty, which will commence the official E.U. withdrawal process.

In addition, other E.U. member countries may consider referendums regarding their E.U. membership.

Any of these events, along with any political changes that may occur as a result of Brexit, could cause political and economic uncertainty in Europe.

As a result, our operations in the U.K., resulting from the recent acquisition of Visa Europe, as well as our global operations, could be impacted.

The announcement of Brexit caused significant volatility in global stock markets and currency exchange rate fluctuations that resulted in the strengthening of the U.S. dollar.

The strengthening of the U.S. dollar relative to the British pound and other currencies may harm our results of operations as the local currency results of our international operations may translate into fewer U.S. dollars.

Uncertainty over Brexit and currency fluctuations could also impact our clients, who may curtail or postpone investments in growing their credit portfolios, limit credit lines, modify fees and loyalty programs, or take other actions that harm our volume and revenue.

It is also difficult to predict how these technologies may be regulated.

In addition, we may make other strategic investments or acquisitions, which like the Visa Europe acquisition are inherently risky and subject to many factors outside our control.

The Visa Europe acquisition involves, and any future strategic endeavors may involve, significant risks and uncertainties, which could include:

| • | failure to mitigate the liabilities of the acquired business; for example, while we have attempted to mitigate the risk of loss associated with certain Visa Europe litigation through the issuance of the preferred stock, there can be no guarantee that the liabilities associated with that litigation will not exceed the value of such preferred stock; |

| • | potential incurrence of debt, including the substantial amount of debt incurred in connection with the Visa Europe acquisition; |

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

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

Our business performance during fiscal [removed: 2016] [added: 2017] reflects [removed: the impacts of] continued uneven [removed: and tepid] economic [removed: growth.][added: growth around the world.]

[removed: We did] [added: | (2) | Our operating expenses for fiscal 2016 do] not [removed: include] [added: reflect the expenses incurred by] Visa [removed: Europe's financial results in our consolidated statements of operations] [added: Europe] from the acquisition date, June 21, 2016, through June 30, 2016 as the impact was immaterial. [added: |]

See Note [removed: 2—Acquisition of Visa Europe, Note] 3—U.S. and Europe Retrospective Responsibility Plans and Note [removed: 20—Legal] [added: 19—Legal] Matters to our consolidated financial [removed: statements.][added: statements included in Item 8—Financial Statements and Supplementary Data of this report.]

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

See Note 4—Fair Value Measurements and Investments [removed: and Note 9—Debt] to our consolidated financial [removed: statements.][added: statements included in Item 8—Financial Statements and Supplementary Data of this report.]

Our financial results for fiscal [removed: 2016] [added: 2017] include the impact of several significant one-time items.

| | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2016] [added: 2017] vs. [removed: 2015] [added: 2016] | | | [removed: 2015] [added: 2016] vs. [removed: 2014] [added: 2015] | |

| Net income, as reported | $ | [removed: 5,991] [added: 6,699] | | | $ | [removed: 6,328] [added: 5,991] | | | $ | [removed: 5,438] [added: 6,328] | | | [removed: (5] [added: 12] | [removed: )%] [added: %] | | [removed: 16] [added: (5] | [removed: %] [added: )%] |

| Diluted earnings per share, as reported(2) | $ | [removed: 2.48] [added: 2.80] | | | $ | [removed: 2.58] [added: 2.48] | | | $ | [removed: 2.16] [added: 2.58] | | | [removed: (4] [added: 13] | [removed: )%] [added: %] | | [removed: 20] [added: (4] | [removed: %] [added: )%] |

| Net income, as adjusted(3) | $ | [removed: 6,862] [added: 8,335] | | | $ | [removed: 6,438] [added: 6,862] | | | $ | [removed: 5,721] [added: 6,438] | | | [removed: 7] [added: 21] | % | | [removed: 13] [added: 7] | % |

| Diluted earnings per share, as adjusted(2),(3) | $ | [removed: 2.84] [added: 3.48] | | | $ | [removed: 2.62] [added: 2.84] | | | $ | [removed: 2.27] [added: 2.62] | | | [removed: 8] [added: 22] | % | | [removed: 16] [added: 8] | % |

| (1) | Figures in the [removed: tables] [added: table] may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers. |

| (2) | The per share amounts for the prior periods presented have been retroactively adjusted to reflect the four-for-one stock split effected in the [removed: fiscal] second quarter of [added: fiscal] 2015. |

| (3) | Adjusted net income and [added: adjusted] diluted earnings per share in fiscal [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014] [added: 2015] exclude the impact of certain significant items that we believe are not indicative of our operating performance, as they [removed: are] [added: were] either [removed: non-recurring, have] [added: non-recurring or had] no cash [removed: impact or are covered by the U.S. retrospective responsibility plan.] [added: impact.] For a full reconciliation of our adjusted financial results, see tables in Adjusted financial results below. |

We recorded net operating revenues of [removed: $15.1] [added: $18.4] billion for fiscal [removed: 2016,] [added: 2017,] an increase of [removed: 9%] [added: 22%] over the prior year [removed: driven by continued growth in processed transactions, nominal payments volume as well as] [added: primarily reflecting] the [removed: fiscal fourth quarter] operating revenues of Visa [removed: Europe.][added: Europe and continued growth in nominal payments volume, processed transactions and nominal cross-border volume.]

The effect of exchange rate movements, as partially mitigated by our hedging program, resulted in [removed: a] [added: an approximately] negative [removed: three] [added: one and a half] percentage point impact to our total operating growth.

Total operating expenses for fiscal [removed: 2016] [added: 2017] were [removed: $7.2] [added: $6.2] billion, compared to [removed: $4.8] [added: $7.2] billion in fiscal [removed: 2015.][added: 2016.]

The [removed: increase] [added: decrease] over the prior year was primarily due to the $1.9 billion loss [added: in fiscal 2016] resulting from the effective settlement of the Framework Agreement between us and Visa Europe upon consummation of the transaction, [removed: combined with acquisition-related costs] [added: offset by the inclusion] of [removed: approximately $152 million.][added: Visa Europe's operating expenses following the acquisition.]

See Note [removed: 2—Acquisition of Visa] [added: 2—Visa] Europe to our consolidated financial [removed: statements.][added: statements included in Item 8—Financial Statements and Supplementary Data of this report.]

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.

See Note [removed: 19—Income] [added: 18—Income] Taxes to our consolidated financial [removed: statements.][added: statements included in Item 8—Financial Statements and Supplementary Data of this report.]

Our financial results for fiscal [removed: 2016, 2015] [added: 2017] and [removed: 2014] [added: 2016] reflect the impact of certain significant items that we do not believe are indicative of our ongoing operating performance in the prior or future years, as they are either [removed: non-recurring,] [added: non-recurring or] have no cash [removed: impact or are covered by the U.S. retrospective responsibility plan.][added: impact.]

| • | Severance cost. In the [removed: fiscal] fourth [removed: quarter,] [added: quarter of fiscal 2016,] we recorded a $110 million charge for severance costs related to personnel [removed: reductions] [added: 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. |

| • | 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 [removed: U.K.] [added: UK] stamp duty recorded in general and administrative expenses. Net of related tax benefit of $56 million, determined by applying applicable [added: 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. [removed: 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. [removed: 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 [removed: Closing.] [added: closing of the Visa Europe acquisition.] Net of related tax expense of $54 million, determined by applying applicable federal and state tax rates, the impact to net income was a decrease of $91 million. |

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

Adjusted operating expenses, operating margin, non-operating [added: (expense)] 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.

The following tables reconcile our as-reported financial measures calculated in accordance with U.S. GAAP to the respective non-GAAP adjusted financial measures for fiscal [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014:][added: 2015:]

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

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

| (2) | Figures in the table may not recalculate exactly due to rounding. Operating [removed: margin and] [added: margin,] diluted earnings per share [removed: figures] [added: and their respective totals] are calculated based on unrounded numbers. |

| (3) | The per share amounts for the prior periods presented have been retroactively adjusted to reflect the four-for-one stock split effected in the [removed: fiscal] second quarter of [added: fiscal] 2015. |

During fiscal [removed: 2016,] [added: 2017,] we repurchased [removed: 91] [added: 77] million shares of our class A common stock in the open market using [removed: $7.0] [added: $6.9] billion of cash on hand.

As of September 30, [removed: 2016,] [added: 2017,] we had remaining authorized funds of [removed: $5.8] [added: $3.9] billion.

All share repurchase programs authorized prior to [removed: October 2015] [added: April 2017] have been completed.

See Note [removed: 14—Stockholders'] [added: 13—Stockholders'] Equity to our consolidated financial [removed: statements.][added: statements included in Item 8—Financial Statements and Supplementary Data of this report.]

We facilitate global commerce through the transfer of value and information among a global network of consumers, merchants, financial institutions, businesses, strategic partners and government entities.

Legal entity reorganization.

In February 2017, we completed a reorganization of Visa Europe and certain other legal entities to align our corporate structure to the geographic jurisdictions in which we conduct business operations.

As a result of the reorganization, during fiscal 2017, we recorded a non-recurring, non-cash income tax provision of $1.5 billion primarily related to the elimination of deferred tax balances originally recognized upon the acquisition of Visa Europe.

Associated with this reorganization, the newly-formed Visa Foundation received all Visa Inc. shares held by Visa Europe, which were previously recorded as treasury stock.

In September 2017, we issued fixed-rate senior notes in an aggregate principal amount of $2.5 billion, with maturities ranging between 5 and 30 years.

Subsequent to our fiscal year-end, in October 2017, we used the majority of the proceeds from this new debt to redeem the $1.75 billion of senior notes that was scheduled to mature in December 2017.

| • | Elimination of deferred tax balances. During the second quarter of fiscal 2017, in connection with our legal entity reorganization, we eliminated deferred tax balances originally recognized upon the acquisition of Visa Europe, resulting in the recognition of a non-recurring, non-cash income tax provision of $1.5 billion. |

| • | Charitable contribution. During the second quarter of fiscal 2017, associated with our legal entity reorganization, we recognized a non-recurring, non-cash general and administrative expense of $192 million, before tax, related to the charitable donation of Visa Inc. shares that were acquired as part of the Visa Europe acquisition and held as treasury stock. Net of the related cash tax benefit of $71 million, determined by applying applicable tax rates, adjusted net income increased by $121 million. |

| | Fiscal 2017 | | | | | | | | | | | | | | | | | | | | | |

| As reported | $ | 6,214 | | | 66 | % | | $ | (450 | ) | | $ | 4,995 | | | $ | 6,699 | | | $ | 2.80 | |

| Elimination of deferred tax balances | — | | | | — | % | | — | | | | (1,515 | | ) | | 1,515 | | | | 0.63 | | |

| Charitable contribution | (192 | | ) | | 1 | % | | — | | | | 71 | | | | 121 | | | | 0.05 | | |

| As adjusted | $ | 6,022 | | | 67 | % | | $ | (450 | ) | | $ | 3,551 | | | $ | 8,335 | | | $ | 3.48 | |

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

Nominal international payments volume growth was positively impacted due to the inclusion of nominal payments volume related to Visa Europe for the 12 months ended June 30, 2017(1).

Growth in processed transactions reflects the inclusion of Visa Europe's processed transactions for the 12 months ended September 30, 2017 and three months ended September 30, 2016.

| | 2017 | | | | 2016 | | | | % Change | | | 2017 | | | | 2016 | | | | % Change | | | 2017 | | | | 2016 | | | | % Change | |

| Consumer credit | $ | 1,309 | | | $ | 1,079 | | | 21 | % | | $ | 2,224 | | | $ | 1,720 | | | 29 | % | | $ | 3,533 | | | $ | 2,799 | | | 26 | % |

| Consumer debit(3) | 1,372 | | | | 1,320 | | | | 4 | % | | 1,545 | | | | 454 | | | | 241 | % | | 2,917 | | | | 1,774 | | | | 64 | % |

| Commercial(4) | 506 | | | | 450 | | | | 12 | % | | 309 | | | | 147 | | | | 110 | % | | 815 | | | | 598 | | | | 36 | % |

| Total nominal payments volume(5) | $ | 3,187 | | | $ | 2,849 | | | 12 | % | | $ | 4,078 | | | $ | 2,321 | | | 76 | % | | $ | 7,265 | | | $ | 5,170 | | | 41 | % |

| Cash volume | 543 | | | | 520 | | | | 5 | % | | 2,357 | | | | 1,775 | | | | 33 | % | | 2,900 | | | | 2,294 | | | | 26 | % |

| Total nominal volume(5),(6) | $ | 3,730 | | | $ | 3,369 | | | 11 | % | | $ | 6,435 | | | $ | 4,095 | | | 57 | % | | $ | 10,165 | | | $ | 7,464 | | | 36 | % |

| Total nominal volume(5),(6) | $ | 3,369 | | | $ | 3,085 | | | 9 | % | | $ | 4,095 | | | $ | 4,303 | | | (5 | )% | | $ | 7,464 | | | $ | 7,388 | | | 1 | % |

| Payments volume growth | | | | | | | | | | | | | | | | | | | | | | | |

| Consumer credit | 29 | % | | 30 | % | | 3 | % | | 13 | % | | 26 | % | | 27 | % | | 5 | % | | 12 | % |

| Consumer debit(3) | 241 | % | | 238 | % | | (2 | )% | | 15 | % | | 64 | % | | 64 | % | | 7 | % | | 11 | % |

| Commercial(4) | 110 | % | | 105 | % | | (2 | )% | | 12 | % | | 36 | % | | 36 | % | | 6 | % | | 10 | % |

| Cash volume growth | 33 | % | | 33 | % | | (12 | )% | | 4 | % | | 26 | % | | 26 | % | | (8 | )% | | 4 | % |

| Net operating revenues | $ | 18,358 | | | $ | 15,082 | | | $ | 13,880 | | | $ | 3,276 | | | $ | 1,202 | | | 22 | % | | 9 | % |

| | 2017 | | | | 2016(2) | | | | 2015 | | | | 2017 vs. 2016 | | | | 2016 vs. 2015 | | | | 2017 vs. 2016 | | | 2016 vs. 2015 | |

Total operating expenses decreased primarily due to the $1.9 billion loss related to the effective settlement of the Framework Agreement between Visa and Visa Europe recorded during fiscal 2016.

The remaining components of total operating expenses increased in fiscal 2017 primarily due to the inclusion of Visa Europe expenses.

Additional factors impacting our operating expenses are discussed below.

| • | General and administrative expenses increased in fiscal 2017 primarily due to $192 million of expense related to the Visa Inc. shares held by Visa Europe that were received by the newly-formed Visa Foundation, as well as an increase in expense to provide product benefits to our account holders as a result of business growth. The increase in 2016 was mainly due to costs incurred related to our acquisition of Visa Europe in 2016 as well as net foreign exchange losses incurred as a result of changes in the U.S. dollar exchange rate against other currencies in which we transact. |

Non-operating (Expense) Income

| | 2017 | | | | 2016(2) | | | | 2015 | | | | 2017 vs. 2016 | | | | 2016 vs. 2015 | | | | 2017 vs. 2016 | | | 2016 vs. 2015 |

In February 2017, to align our corporate structure to the geographic jurisdictions in which we conduct business operations, we completed a reorganization of Visa Europe and certain other legal entities.

As a result of the reorganization, we recorded a non-recurring, non-cash income tax provision of $1.5 billion primarily related to the elimination of deferred tax balances originally recognized upon the acquisition of Visa Europe.

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

Visa Europe acquisition.

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.

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 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 Kingdom before the Closing.

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

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

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 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 prior fiscal years.

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

| • | Litigation provision. During fiscal 2014, we recorded a litigation provision of $450 million and related tax benefits of $167 million associated with the 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 U.S. litigation escrow account. See Note 3—U.S. and Europe Retrospective Responsibility Plans and Note 20—Legal Matters to our consolidated financial statements. |

| Diluted weighted-average shares outstanding, as reported | | | | | | | | | | | | | | | | | | | | 2,414 | | |

| Diluted weighted-average shares outstanding, as reported | | | | | | | | | | | | | | | | | | | | 2,457 | | |

| | Fiscal 2014 | | | | | | | | | | | | | | | | | | | | | |

| As reported | $ | 5,005 | | | 61 | % | | $ | 27 | | | $ | 2,286 | | | $ | 5,438 | | | $ | 2.16 | |

| Litigation provision | (450 | | ) | | 4 | % | | — | | | | 167 | | | | 283 | | | | 0.11 | | |

| As adjusted | $ | 4,555 | | | 64 | % | | $ | 27 | | | $ | 2,453 | | | $ | 5,721 | | | $ | 2.27 | |

| Diluted weighted-average shares outstanding, as reported | | | | | | | | | | | | | | | | | | | | 2,523 | | |

Nominal international payments volume was negatively impacted by the overall strengthening of the U.S. dollar.

Processed transactions sustained healthy growth reflecting the ongoing worldwide shift to electronic currency.

| Visa Europe(5) | | | | | | | | | | | | 479 | | | | | | | | NM | | | 479 | | | | | | | | NM | |

| Visa Europe(5) | | | | | | | | | | | | 175 | | | | | | | | NM | | | 175 | | | | | | | | NM | |

| Total nominal volume(6) | $ | 3,370 | | | $ | 3,086 | | | 9 | % | | $ | 4,749 | | | $ | 4,303 | | | 10 | % | | $ | 8,119 | | | $ | 7,388 | | | 10 | % |

| | 2015 | | | | 2014 | | | | % Change | | | 2015 | | | | 2014 | | | | % Change | | | 2015 | | | | 2014 | | | | % Change | |

| Consumer credit | $ | 980 | | | $ | 872 | | | 12 | % | | $ | 1,676 | | | $ | 1,599 | | | 5 | % | | $ | 2,656 | | | $ | 2,470 | | | 8 | % |

| Consumer debit(3) | 1,202 | | | | 1,127 | | | | 7 | % | | 462 | | | | 453 | | | | 2 | % | | 1,663 | | | | 1,580 | | | | 5 | % |

| Commercial(4) | 412 | | | | 370 | | | | 11 | % | | 150 | | | | 145 | | | | 4 | % | | 562 | | | | 514 | | | | 9 | % |

| Total nominal payments volume | $ | 2,594 | | | $ | 2,369 | | | 10 | % | | $ | 2,288 | | | $ | 2,196 | | | 4 | % | | $ | 4,882 | | | $ | 4,565 | | | 7 | % |

| Cash volume | 491 | | | | 469 | | | | 5 | % | | 2,015 | | | | 2,122 | | | | (5 | )% | | 2,506 | | | | 2,591 | | | | (3 | )% |

| Total nominal volume(6) | $ | 3,086 | | | $ | 2,838 | | | 9 | % | | $ | 4,303 | | | $ | 4,319 | | | — | % | | $ | 7,388 | | | $ | 7,157 | | | 3 | % |

Overall revenue growth also reflects the positive impact of select pricing modifications effected in the third quarter of fiscal 2015.

costs, an increase in personnel costs that were invested in and capitalized as part of technology development projects and lower incentive compensation.

The increase in fiscal 2015 was primarily due to an increase in headcount reflecting our strategy to invest for future growth, combined with higher incentive compensation.

| • | Marketing expenses in fiscal 2016 reflect efficiencies in production and agency costs which were redeployed for other marketing uses, and Visa Europe expenses for the fiscal fourth quarter. The decrease in marketing during fiscal 2015 compared to fiscal 2014 was mainly due to the overall strengthening of the U.S. dollar as marketing spend in local currencies was converted to U.S. dollars, combined with the absence of the 2014 Sochi Winter Olympics and 2014 FIFA World Cup spend that was incurred in fiscal 2014. The decrease was partially offset by increases in promotional campaigns that support our growth strategies and product initiatives. |

| • | General and administrative expenses increased in fiscal 2016 mainly due to costs incurred related to our acquisition of Visa Europe and the inclusion of Visa Europe expenses beginning in the fourth quarter of fiscal 2016. See Note 2—Acquisition of Visa Europe to our consolidated financial statements. The increase was also attributable to net foreign exchange losses incurred as a result of changes in the U.S. dollar exchange rate against other currencies in which we transact. The increase in fiscal 2015 was mainly due to an increase in travel activities, product enhancements and facilities costs in support of our business growth, combined with losses incurred from the sale of assets held by an international subsidiary. These increases were partially offset by unrealized foreign exchange gains and the absence of the fiscal 2014 disposal of obsolete technology assets. |

| • | Litigation provision decreased in fiscal 2016 primarily due to the absence of a loss incurred in fiscal 2015 upon the settlement of uncovered litigation. The decrease in fiscal 2015 reflects the absence of a $450 million accrual related to the U.S. covered litigation incurred in fiscal 2014. See Note 20—Legal Matters and Note 3—U.S. and Europe Retrospective Responsibility Plans to our consolidated financial statements. |

| • | Visa Europe Framework Agreement loss resulted from the effective settlement of the Framework Agreement between Visa and Visa Europe upon consummation of the transaction. See Note 2—Acquisition of Visa Europe to our consolidated financial statements. |

| (2) | Our non-operating income (expense) for fiscal 2016 does not reflect the financial results of Visa Europe from the acquisition date, June 21, 2016, through June 30, 2016 as the impact was immaterial. Fiscal 2016 non-operating income (expense) includes financial results of Visa Europe for the three months ended September 30, 2016. See Note 2—Acquisition of Visa Europe to our consolidated financial statements. |

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: $2.7] [added: $3.1] billion and [removed: $1.2] [added: $2.7] billion at September 30, [removed: 2016] [added: 2017] and [removed: 2015,] [added: 2016,] respectively.

The aggregate notional amount outstanding at September 30, [removed: 2016] [added: 2017] 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% increase or decrease in the value of the functional currencies is estimated to create an additional fair value gain of approximately [removed: $160] [added: $210] million or loss of approximately [removed: $190] [added: $250] million, respectively, on our foreign currency forward contracts outstanding at September 30, [removed: 2016.][added: 2017.]

See Note 1—Summary of Significant Accounting Policies and Note [removed: 12—Derivative] [added: 11—Derivative] and Non-derivative Financial Instruments to our consolidated financial [removed: statements.][added: statements included in Item 8—Financial Statements and Supplementary Data of this report.]

On the third anniversary of the Closing, we will pay additional purchase consideration of €1 billion, plus 4.0% [removed: compound] [added: compounded] annual interest.

See Note [removed: 2—Acquisition of Visa] [added: 2—Visa] Europe to our consolidated financial [removed: statements.][added: statements included in Item 8—Financial Statements and Supplementary Data of this report.]

A hypothetical 10% decline in the U.S. dollar against the euro, compared to the exchange rate at September 30, [removed: 2016,] [added: 2017,] would increase the deferred purchase consideration liability by [removed: $123] [added: $130] million, including interest.

A hypothetical 10% change in the euro against the U.S. dollar compared to the exchange rate at September 30, [removed: 2016, could] [added: 2017, would] result in a foreign currency translation adjustment of [removed: $1.9] [added: $2] billion.

[removed: In the third quarter, we designated] [added: We designate a portion of] our euro-denominated deferred consideration liability as a net investment hedge against a portion of [added: the foreign exchange rate exposure of] our net investment [added: of $18.8 billion] in Visa Europe.

The fair value balances of our fixed-rate investment securities at September 30, [removed: 2016] [added: 2017] and [removed: 2015] [added: 2016] were [removed: $5.1] [added: $6.4] billion and [removed: $4.4] [added: $5.1] billion, respectively.

A hypothetical 100 basis point increase or decrease in interest rates would create an estimated change in fair value of approximately [removed: $49] [added: $29] million on our fixed-rate investment securities at September 30, [removed: 2016.][added: 2017.]

The fair value balances of our adjustable-rate debt securities were [removed: $2.2] [added: $1.8] billion and [removed: $1.7] [added: $2.2] billion at September 30, [removed: 2016] [added: 2017] and [removed: 2015,] [added: 2016,] respectively.

At September 30, [removed: 2016] [added: 2017] and [removed: 2015,] [added: 2016,] our U.S. defined benefit pension plan assets were $1.1 billion [removed: and $1.0 billion, respectively,] [added: at each year end,] and projected benefit obligations were [removed: $1.1] [added: $0.9] billion and [removed: $1.0] [added: $1.1] 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: $254] [added: $241] million in the funded status and an increase of approximately [removed: $40] [added: $44] million in pension cost.

At September 30, [added: 2017 and] 2016, our non-U.S. defined benefit pension plan assets were [removed: $415] [added: $433] million and [added: $415 million, respectively, and] projected benefit obligations were [added: $433 million and] $474 [removed: million.][added: million, 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: $127] [added: $157] million in the funded status and an increase of approximately [removed: $9] [added: $11] 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: 2017,] [added: 2018,] if any, which would be made in September [removed: 2017.][added: 2018.]

See Note 1—Summary of Significant Accounting Policies and Note 11—Derivative and Non-derivative Financial Instruments to our consolidated financial statements included in Item 8—Financial Statements and Supplementary Data of this report.

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

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

[added: Our focus, expertise, and assets have enabled] Visa [removed: is] [added: to become] one of the world’s largest retail electronic payments [removed: network] [added: networks] based on payments [removed: volume, number of transactions] [added: volume] and number of [removed: cards in circulation.][added: transactions.]

[removed: ][added: ]

Visa operates in a four party model, which includes card issuing financial institutions, [removed: acquirers] [added: acquirers,] and merchants.

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

[removed: In most cases,] [added: Generally,] our financial institution clients are responsible for [removed: and manage] [added: managing] account holder and merchant relationships.

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

In addition, we do not receive as revenue [removed: any of] the fees that merchants are charged directly for acceptance by [removed: the] [added: their] acquirers.

[removed: ][added: ]

The Visa brand is one of the [added: world's] most [removed: well-known] [added: recognized, trusted,] and valuable [removed: brands in the world.][added: brands.]

Anchored on the notion that Visa is [removed: 'everywhere] [added: "everywhere] you want to [removed: be,'] [added: be,"] the brand stands for acceptance, security, [removed: convenience] [added: convenience, speed,] and [removed: universality.][added: reliability.]

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

[removed: We leverage our] [added: Our] brand strength [added: helps us] to deliver added value to financial institutions, [removed: merchants] [added: merchants,] and other clients through compelling brand expressions, expanded products and services, and innovative marketing efforts.

[removed: ][added: ]

[removed: *Please] [added: | (2) | Please] see Item 7—Management's Discussion and Analysis of Financial Condition and Results of Operations for a reconciliation of our adjusted financial results. [added: |]

Visa Europe [removed: Acquisition.][added: Integration]

[removed: At its heart,] Visa is [added: primarily] a technology company.

We have [removed: executed on] [added: increased] our [removed: workforce plan by hiring a total of 1,700] technology [removed: employees] [added: employee footprint by more than 2,000] globally over the past [removed: two] [added: three] years, including nearly [removed: 750] [added: 1,000] new college graduates, replacing a significant percentage of our contractor and vendor spend.

We are making steady progress on our technology strategic roadmap, resulting in enhanced services [removed: for our] [added: in the payments] ecosystem [removed: stakeholders] and positive impacts to our infrastructure.

Since the launch of Visa’s Developer Platform (VDP) in [removed: 2015, more than 180 of Visa’s product or service functions are available in API or] [added: fiscal 2016, we have made our] application program [removed: interface format] [added: interfaces (APIs) available] to our [removed: clients] [added: developers, clients,] and partners.

We added new services to enable clients to develop support for tokenized transactions and create new and innovative solutions in mobile, [removed: ecommerce] [added: ecommerce,] and digital face-to-face transactions.

Cybersecurity remains a top [removed: focus] [added: focus,] and in fiscal 2016 we launched our [removed: new] Threat Intelligence Fusion Platform, a cyber command and control center that provides integrated cybersecurity operations to further [removed: help] protect our data and assets.

[removed: At the same time, new] [added: New] open technologies have been added [added: systematically to our infrastructure and platform components.]

[removed: systematically to our infrastructure and platform components and we] [added: We] continue to bolster the resiliency of our infrastructure and application services to provide high availability of our [removed: services for our clients.][added: client services.]

How We Work with Partners [removed: -] [added: –] Innovation Centers, [removed: VDP & API Suite.][added: Visa Developer Program, Certifications, and Startups]

To drive new [removed: technologies] [added: solutions] in the payments space and accelerate the proliferation of safe and fast digital payments, we opened [added: a] new innovation [removed: centers] [added: center] in [removed: Dubai, Miami and Singapore] [added: London] in fiscal [removed: 2016.][added: 2017.]

[removed: Along with the San Francisco innovation center and European] [added: Our] innovation [removed: hubs in London, Tel Aviv and Berlin, these] centers foster collaboration with our financial institution clients, [removed: partners] [added: merchants, partners,] and developers across the regions to spur [added: the] creation of the next generation of payments and commerce applications and solutions.

[removed: In 2016,] VDP [removed: became generally available, offered application developers around the globe] [added: offers them] access to Visa technology, [removed: services] [added: services,] and tools, and [removed: provided] [added: provides] safe testing environments for the development of new digital payments and commerce solutions.

Debit: Debit cards are issued by [removed: banks] [added: financial institutions] to allow consumers [added: and small businesses] to [removed: access] [added: purchase goods and services using] funds held in their demand deposit [removed: accounts (DDAs).][added: accounts.]

Debit cards [removed: allow consumers] [added: enable cardholders] to transact [added: – in person, online, or via mobile –] without needing cash or checks and without accessing a line of credit.

Credit: Credit cards are issued by [removed: banks] [added: financial institutions] to allow consumers [added: and businesses] to access credit to pay for goods and services.

Visa does not extend credit; however, we provide combinations of card [removed: benefits] [added: benefits, including technology, authorization, fraud tools,] and brand [removed: support,] [added: support] that financial institutions use to support and enable their credit products.

We also partner with our clients on product design, [removed: customer segmentation] [added: consumer segmentation,] and [removed: customer] [added: consumer] experience design to help financial institutions better deliver products and services that match their consumers’ needs.

[added: Prepaid:] Prepaid [removed: cards can be] [added: products draw from a designated balance] funded by individuals, [removed: corporations] [added: corporations,] or governments.

Prepaid cards address many [removed: consumer use] [added: consumer-use] cases and [removed: needs:][added: needs including, general purpose reloadable, payroll, government and corporate disbursements, healthcare, gift, and travel.]

[removed: ][added: ]

Commercial: We offer a portfolio of [added: commercial payment solutions including] corporate (travel) [removed: cards and] [added: cards,] purchasing [removed: card (P-card) products] [added: cards, virtual accounts, and disbursement accounts] covering all major [added: industry] segments.

The [removed: Commercial] [added: commercial] category is [removed: not one single product but] a portfolio of [removed: products] [added: solutions] designed to bring efficiency, [removed: controls] [added: controls,] and automation to [removed: corporate] [added: commercial] and government [removed: travel and procurement] [added: payment] processes ranging from employee travel to fully integrated, invoice-based payables.

We support financial institutions, [added: partners in the] accounts payable [removed: platforms, like Bottomline and MineralTree,] [added: space,] and technology companies as they build and expand their [removed: business-to-business] [added: commercial payment] platforms.

We facilitate global commerce through the transfer of value and information among a global network of consumers, merchants, financial institutions, businesses, strategic partners, and government entities.

Our mission is to connect the world through the most innovative, reliable, and secure payment network – enabling individuals, businesses, and economies to thrive.

To deliver on this mission, we are focused on seven strategic pillars:

Visa connects millions of consumers and businesses every day through the power of our network.

| (1) | As of September 30, 2017 |

| (2) | As of June 30, 2017 |

| (3) | Transacted on our payment products for the 12 months ended June 30, 2017 |

Visa has focused its investments, partnerships, and expertise to enhance the security of our network, and to enable consumers and businesses to pay and be paid with confidence.

As payments methods evolve, we are focused on four primary areas:

| • | Protecting payment data with a payments architecture that complies with industry standards; |

| • | Rendering the use of sensitive payment data useless by deploying technologies such as the EMV chip and tokenization; |

| • | Using predictive analytics, intelligence, and insights to identify and prevent fraud before it happens; and |

| • | Empowering consumers to actively protect their own financial information and transactions. |

Fiscal 2017 Key Statistics (including Visa Europe)(1)

| (1) | Figures and period-over-period percentages reflect the inclusion of Visa Europe for the full year of fiscal 2017. We acquired Visa Europe on June 21, 2016. |

| | |

| --- | --- |

| (3) | For the 12 months ended June 30, 2017, upon which fiscal 2017 service revenues are based. |

In fiscal 2017, we made significant progress on integrating Visa Europe into the broader Visa group following our completion of the acquisition in June 2016.

We streamlined and integrated our European functions with the global Visa organization and bolstered the European leadership team.

We invested in launching a suite of digital products, including Visa Checkout and Visa Commerce Network, and entered into new strategic partnerships, including Klarna and Paypal, to spur innovation and drive usage and acceptance.

We made significant progress in our multi-year effort to harmonize our respective technology systems and prepare for European client migrations onto VisaNet beginning in fiscal 2018.

Along with our new innovation center in London, we believe these efforts will help bring more enhanced capabilities as well as provide greater scale and additional levels of cybersecurity for our European clients.

In addition, we made significant progress in entering into new commercial agreements with our European clients to transition the business from the prior association business model to a for-profit model.

These new commercial arrangements have led to an increase in client incentives as we have replaced the rebates in effect under the prior model.

Technology Transformation

In fiscal 2015, we embarked on a multi-year journey to transform our use of technology.

In fiscal 2017, we continued to embed security earlier in the software development lifecycle to further strengthen our security posture.

By providing access to Visa capabilities through an open network of APIs, the Visa Developer Platform allows global partners to transform ideas into new digital commerce experiences.

Visa’s Everywhere Initiative is an innovation program in over 40 countries designed to generate and harness ideas within the start-up community to solve business problems, influence Visa's product development, and support Visa's clients.

Visa makes minority investments in companies around the world that we believe will further our vision and strategic objectives, support deeper engagement with key partners, and expand access to payment solutions worldwide.

In addition, through the Visa Ready certification program, we provide the structure that allows partners to introduce devices, software, and solutions that can securely initiate or accept Visa payments.

Visa provides a strong brand; the network infrastructure and processing; acceptance; product features and support; risk tools and services; and industry expertise to help issuers optimize their debit offerings.

Prepaid cards also play an important part in financial inclusion, bringing payment solutions to those with limited or no access to traditional banking products.

Beyond payment processing, we provide comprehensive data management solutions, consulting and analytics support, and integration capabilities.

Global ATM: The Visa/PLUS Global ATM network provides account holders with convenient cash access in more than 200 countries and territories worldwide through issuing and acquiring partnerships with both financial institutions and independent ATM operators.

We are in the process of integrating Visa Europe's processing systems with VisaNet.

Until that process is completed, we will continue to maintain the current authorization, clearing, and settlement systems in Europe while ensuring interoperability between such systems and VisaNet.

VisaNet provides secure and reliable payments around the world and is capable of handling more than 65,000 transaction messages a second.

In fiscal 2017, our product enhancement focus was making Visa Checkout more convenient for consumers to sign in and sign up by enabling biometric sign in.

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

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. |

* Total volume includes Europe for the fourth quarter.

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

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.

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 also have plans to raise an additional $2 billion in debt by the end of calendar year 2016, subject to market conditions.

Technology Transformation.

With the intensifying digital economy and the ubiquity of mobile technology, data and enhanced security driving the future of payments, we embarked on a multi-year journey in 2015 to transform technology at Visa with the main areas of focus on opening our network and creating a digital platform for innovation while at the same time adding layers of security and operational resilience.

By exposing new and modified APIs through a variety of channels, Visa has made digital payment solutions available to support hundreds of financial institutions and technology partners such as Google, Microsoft and Samsung.

Visa provides the network infrastructure, product support and industry knowledge to help issuers optimize their debit offerings and help consumers and merchants efficiently transact for the purchase of goods and services, whether in person or through online or mobile channels.

Across all Visa’s core products, Visa offers security protections that help prevent, detect and resolve fraud.

Where applicable, Visa's zero-liability policy protects consumer cardholders from any unauthorized charges.

In fiscal 2016, we saw significant volume growth from the conversion of the USAA portfolio to Visa and opening of credit acceptance at Costco membership warehouses in the U.S.

Prepaid: Prepaid products draw funds from a designated pool of funds.

While Visa Europe's systems are being integrated with our systems, we will continue to maintain mostly separate authorization, clearing and settlement systems from Visa Europe while ensuring interoperability with their processing centers in the United Kingdom (U.K.).

VisaNet is capable of handling more than 65,000 transactions per second reliably, conveniently and securely.

In October 2016, we rolled out a redesigned Visa Checkout experience, making it easier for consumers to enroll and complete purchases on mobile devices.

We recently announced that we are opening the Visa Checkout platform to clients and partners, allowing them to integrate their digital wallets into Visa Checkout for streamlined authentication and checkout.

Visa Direct: Visa Direct is a push payment product platform that facilitates payer-initiated transactions that are sent directly to the Visa account of the recipient.

It supports faster payments use cases like person-to-person (P2P) payments, and disbursements.

We are working with key partners, including processors like Fiserv, FIS and Jack Henry & Associates, and originators like Early Warning (EWS), Ingo Money, Hyperwallet, Wells Fargo and QIWI, along with merchants to expand the distribution and usage of push payments.

Refer to Note [removed: 20—Legal] [added: 19—Legal] Matters to our consolidated financial statements included in Item [removed: 8] [added: 8—Financial Statements and Supplementary Data] of this report.

For the fiscal year ended September 30, [removed: 2016][added: 2017]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, [removed: or] a non-accelerated [removed: filer.][added: filer, smaller reporting company, or an emerging growth company.]

See the definitions of “large accelerated filer” “accelerated [removed: filer” and] [added: filer,”] “smaller reporting [removed: company”] [added: company,” and "emerging growth company"] in Rule 12b-2 of the Exchange Act.

| Large accelerated filer þ | [removed: |] Accelerated filer o | [added: Smaller reporting company o |]

| Non-accelerated filer o [added: (Do not check if a smaller reporting company)] | | [removed: Smaller reporting] [added: Emerging growth] company o |

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: 2016,] [added: 2017,] the last business day of the registrant’s most recently completed second fiscal quarter) was approximately [removed: $145.5] [added: $164.1] billion.

As of November [removed: 9, 2016,] [added: 10, 2017,] there were [removed: 1,867,580,597] [added: 1,813,463,251] 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: 16,814,896] [added: 12,665,935] shares outstanding of the registrant’s class C common stock, par value $0.0001 per share.

Portions of the Registrant’s Proxy Statement for the [removed: 2016] [added: 2018] Annual Meeting of Stockholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein.

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: 2016.][added: 2017.]

| Item 1 | [removed: [Business](#sC718677AFAE45A64A01CF07E90CF5776)] [added: [Business](#s95ED593739B054C8A635EDD7F1CE38F7)] | [removed: [4](#sC718677AFAE45A64A01CF07E90CF5776)] [added: [4](#s95ED593739B054C8A635EDD7F1CE38F7)] |

| Item 1A | [Risk [removed: Factors](#sDC57D32ED14654849F274D9B2A777D13)] [added: Factors](#sF942A912D0F0503B8B533D3451C64C0F)] | [removed: [14](#sDC57D32ED14654849F274D9B2A777D13)] [added: [18](#sF942A912D0F0503B8B533D3451C64C0F)] |

| Item 1B | [Unresolved Staff [removed: Comments](#sE20F009CFD085D6D89BBB6CF283C02A9)] [added: Comments](#sF32F733B0D1456FE95846C6F91B71336)] | [removed: [25](#sE20F009CFD085D6D89BBB6CF283C02A9)] [added: [28](#sF32F733B0D1456FE95846C6F91B71336)] |

| Item 2 | [removed: [Properties](#s934BD0E0A5D751069BA9CA9285061771)] [added: [Properties](#s598591A9D5B458B58C4CF42A399FC303)] | [removed: [25](#s934BD0E0A5D751069BA9CA9285061771)] [added: [29](#s598591A9D5B458B58C4CF42A399FC303)] |

| Item 3 | [Legal [removed: Proceedings](#sF5256639FBD95AF9961EDE2544277B95)] [added: Proceedings](#sD22ECCA8D5C0595E87AEEFFD505E2D5B)] | [removed: [25](#sF5256639FBD95AF9961EDE2544277B95)] [added: [29](#sD22ECCA8D5C0595E87AEEFFD505E2D5B)] |

| Item 4 | [Mine Safety [removed: Disclosures](#s3337F6991744599EB41915D348BB510B)] [added: Disclosures](#sA1A3182158105745AA1A065B7D02FB65)] | [removed: [25](#s3337F6991744599EB41915D348BB510B)] [added: [29](#sA1A3182158105745AA1A065B7D02FB65)] |

| Item 5 | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#s0F99EBDE9DD25B3B9B2AD9CA832DDE36)] [added: Securities](#s0A7B004326A65D8B97B838D7C5EAA77B)] | [removed: [26](#s0F99EBDE9DD25B3B9B2AD9CA832DDE36)] [added: [30](#s0A7B004326A65D8B97B838D7C5EAA77B)] |

| Item 6 | [Selected Financial [removed: Data](#s6A0F44B0924253B59FCCD5E249D6B2E4)] [added: Data](#s84BF2634E40658D2B62EE12F0C77ACAF)] | [removed: [29](#s6A0F44B0924253B59FCCD5E249D6B2E4)] [added: [32](#s84BF2634E40658D2B62EE12F0C77ACAF)] |

| Item 7 | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#s19A76878BE5951E3A09C473251061254)] [added: Operations](#s6D8D66981E2653DA892EEFBCE4586FF4)] | [removed: [30](#s19A76878BE5951E3A09C473251061254)] [added: [33](#s6D8D66981E2653DA892EEFBCE4586FF4)] |

| Item 7A | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#s9FA9561AB6575C94A800EA33BCE3C240)] [added: Risk](#sC981603F166259D29F8D49ED88F80643)] | [removed: [48](#s9FA9561AB6575C94A800EA33BCE3C240)] [added: [50](#sC981603F166259D29F8D49ED88F80643)] |

| Item 8 | [Financial Statements and Supplementary [removed: Data](#sF25521DE980F5C9C9A59FD341D1882E3)] [added: Data](#s7956CFE8F79E51CC8364DF3D200DF130)] | [removed: [50](#sF25521DE980F5C9C9A59FD341D1882E3)] [added: [52](#s7956CFE8F79E51CC8364DF3D200DF130)] |

| Item 9 | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#s8BD798A08E9A50A3BCFB5E713A0EF6AA)] [added: Disclosure](#s826F417E57FB5AA3BD4A746B2A4E3F4E)] | [removed: [120](#s8BD798A08E9A50A3BCFB5E713A0EF6AA)] [added: [114](#s826F417E57FB5AA3BD4A746B2A4E3F4E)] |

| Item 9A | [Controls and [removed: Procedures](#sC0DF98E26BD159519F557FEC9E0D3418)] [added: Procedures](#sAE8FA7D4D6EE5D239BA981300F382782)] | [removed: [120](#sC0DF98E26BD159519F557FEC9E0D3418)] [added: [114](#sAE8FA7D4D6EE5D239BA981300F382782)] |

| Item 9B | [Other [removed: Information](#sF39FEE47CFD050CFB9E6531784EF2147)] [added: Information](#s66B9A1A2CEA8515D93EFEB94F9E99706)] | [removed: [121](#sF39FEE47CFD050CFB9E6531784EF2147)] [added: [114](#s66B9A1A2CEA8515D93EFEB94F9E99706)] |

| [PART [removed: III](#s596CBD8F7C38507FB867D99A416C33F9)] [added: III](#sBD5366B53BC35272BBDBAC27181F0ED4)] | | |

| Item 10 | [Directors, Executive Officers and Corporate [removed: Governance](#sDDDF9C9FAB855F7F98AAA6912DCEF324)] [added: Governance](#sD8239864B81159FC971ADF32E39CC135)] | [removed: [122](#sDDDF9C9FAB855F7F98AAA6912DCEF324)] [added: [115](#sD8239864B81159FC971ADF32E39CC135)] |

| Item 11 | [Executive [removed: Compensation](#s6EB6400F6B3653A7AA6477F9B480EC81)] [added: Compensation](#sEF1D1C2B485B5D9BA39C787B566624F5)] | [removed: [122](#s6EB6400F6B3653A7AA6477F9B480EC81)] [added: [115](#sEF1D1C2B485B5D9BA39C787B566624F5)] |

| Item 12 | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#s948F7D97226756AB9BAA1084DCB71E89)] [added: Matters](#s570B4306DB035D4CB9C6DD6F2AD3D87A)] | [removed: [122](#s948F7D97226756AB9BAA1084DCB71E89)] [added: [115](#s570B4306DB035D4CB9C6DD6F2AD3D87A)] |

| Item 13 | [Certain Relationships and Related Transactions, and Director [removed: Independence](#sD49EDC745A915B11830BFBA3AECC7E9A)] [added: Independence](#s5EC4EF526350596D9A517B393FF0D5B0)] | [removed: [122](#sD49EDC745A915B11830BFBA3AECC7E9A)] [added: [115](#s5EC4EF526350596D9A517B393FF0D5B0)] |

| Item 14 | [Principal Accounting Fees and [removed: Services](#sC863C01D663C554E9CB6955CBDC14DC8)] [added: Services](#s8530B0C6FDF15F6A92E9FF64D6C60509)] | [removed: [122](#sC863C01D663C554E9CB6955CBDC14DC8)] [added: [115](#s8530B0C6FDF15F6A92E9FF64D6C60509)] |

| Item 15 | [Exhibits, Financial Statement [removed: Schedules](#sD8601EB73A7456378E38C9819499B80F)] [added: Schedules](#s2484AB0828A85CEFBE9083BB82020CD6)] | [removed: [123](#sD8601EB73A7456378E38C9819499B80F)] [added: [116](#s2484AB0828A85CEFBE9083BB82020CD6)] |

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, [removed: strategies,] [added: strategies and] growth of our [removed: business,] [added: business;] integration of Visa Europe, [added: including the migration of European activity to VisaNet and] anticipated [added: benefits for our European clients; anticipated] expansion of our products in certain [removed: countries, plans to issue additional debt,] [added: countries;] industry [removed: developments,] [added: developments;] expectations regarding [removed: litigation,] [added: litigation matters, investigations and proceedings;] timing and amount of stock [removed: repurchases,] [added: repurchases;] sufficiency of sources of liquidity and [removed: funding,] [added: funding;] effectiveness of our risk management [removed: programs] [added: programs;] and expectations regarding the impact of recent accounting pronouncements on our consolidated financial statements.

10-K 1 v093017.htm 10-K


| [PART I](#s7BD35915C53A515D98EF117994CA2E28) | | |

| [PART II](#sAA69D779F90E555686402D7AC0090F61) | | |

| [PART IV](#sEE5ADD5024075F0C8FD2BF2E3F4D4B1A) | | |

10-K 1 v093016.htm 10-K

| (Do not check if a smaller reporting company) | | |

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

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

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

At September 30, 2017, we owned or leased 100 offices in 69 countries around the world.

Our corporate headquarters are located in owned and leased premises in the San Francisco Bay Area.

In addition, we own three data processing centers in the United States and the United Kingdom, and we lease three data processing centers in Japan, Singapore and the United Kingdom.

At September 30, 2016, we owned and leased approximately 3.9 million square feet of office and processing center space in 67 countries around the world, of which approximately 2.0 million square feet are owned and the remaining 1.9 million square feet are leased.

Our corporate headquarters is located in the San Francisco Bay Area and consists of four buildings that we own, totaling 0.9 million square feet, and 0.1 million square feet of office space that we lease.

We also own an office building in Miami, Florida, totaling approximately 0.2 million square feet.

In addition, we own and operate two primary processing centers with adjacent office facilities in the United States, totaling approximately 0.8 million square feet.

At November [removed: 9, 2016,] [added: 10, 2017,] we had 362 stockholders of record of our class A common stock.

| Fiscal [removed: 2015] [added: 2017] | High | | | | Low | | |

| First Quarter | $ | [removed: 67.33 | | | $ | 48.80] [added: 0.165] | |

| Second Quarter | $ | [removed: 69.66 | | | $ | 61.29] [added: 0.165] | |

| Third Quarter | $ | [removed: 70.69 | | | $ | 64.35] [added: 0.165] | |

| Fourth Quarter | $ | [removed: 76.92 | | | $ | 60.00] [added: 0.165] | |

There is currently no established public trading market for our class B or [removed: class] C common stock.

There were [removed: 1,656] [added: 1,604] and [removed: 676] [added: 608] holders of record of our class B and [removed: class] C common stock, respectively, as of November [removed: 9, 2016.][added: 10, 2017.]

During the fiscal years ended September 30, [removed: 2016] [added: 2017] and [removed: 2015,] [added: 2016,] 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 stock and [removed: U.K.&I] [added: series B] and [removed: Europe] [added: C] preferred stock, on an as-converted basis) to all holders of record of our common and preferred stock on the respective record dates.

| Fiscal [removed: 2015] [added: 2017] | Dividend Per Share | | |

| First Quarter | $ | [removed: 0.12] [added: 83.96] | | [added: | $ | 75.17 | |]

| Second Quarter | $ | [removed: 0.12] [added: 92.05] | | [added: | $ | 78.49 | |]

| Third Quarter | $ | [removed: 0.12] [added: 96.60] | | [added: | $ | 88.13 | |]

| Fourth Quarter | $ | [removed: 0.12] [added: 106.84] | | [added: | $ | 93.19 | |]

Additionally, in October [removed: 2016,] [added: 2017,] our board of directors declared a quarterly cash dividend of [removed: $0.165] [added: $0.195] per share of class A common stock (determined in the case of class B and C common stock and [removed: U.K.&I] [added: series B] and [removed: Europe] [added: C] preferred [added: stock on an as-converted basis) payable on December 5, 2017, to holders of record as of November 17, 2017 of our common and preferred stock.]

The table below sets forth [removed: the Company's] [added: our] purchases of common stock during the quarter ended September 30, [removed: 2016.][added: 2017.]

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

| (1) | Includes [removed: 24,248] [added: 16,235] shares of class A common stock withheld at an average price of [removed: $78.23] [added: $99.15] per share (per the terms of grants under the Visa 2007 Equity Incentive Compensation Plan) to offset tax withholding obligations that occur upon vesting and release of restricted shares. |

| (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 [removed: October 2015 and July 2016,] [added: April 2017,] our board of directors authorized [added: a] share repurchase [removed: programs] [added: program] for $5.0 [removed: billion each. These authorizations have] [added: billion. This authorization has] no expiration date. All share repurchase programs authorized prior to [removed: October 2015] [added: April 2017] have been completed. |

The table below presents information as of September 30, [removed: 2016,] [added: 2017,] 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.

For a description of the awards issued under the EIP and the ESPP, see Note [removed: 16—Share-based] [added: 15—Share-based] Compensation to our consolidated financial statements included in Item 8—Financial Statements and Supplementary Data of this report.

| Plan Category | (a) Number Of Shares Of Class A Common Stock Issuable Upon Exercise Of Outstanding Options And [removed: Purchase] Rights | | | Weighted-Average Exercise Price Of Outstanding Options [removed: And Purchase Rights] | | | | Number Of Shares Of Class A Common Stock Remaining Available For Future Issuance Under Equity Compensation Plans (Excluding Shares Reflected In Column (a)) | | |

| (1) | [removed: Includes 8,876,484 outstanding options under the EIP and 344,905 outstanding purchase rights under the ESPP. In 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: 2016, pursuant to] [added: 2017 consisted of 7,115,876] outstanding [added: options, 4,673,701 outstanding] restricted stock units and [added: 937,675 outstanding] performance [removed: shares, totals 3,146,954] [added: shares under the EIP] and [removed: 1,042,012, respectively.] [added: 353,980 purchase rights outstanding under the ESPP.] |

| (2) | [removed: Does] [added: The weighted-average exercise price is calculated based solely on the exercise prices of the outstanding stock options and does] not [removed: include] [added: reflect] the [added: shares that will be issued upon the vesting of outstanding restricted stock units and performance shares, which have no exercise price. Additionally, it excludes the] weighted-average exercise price of the outstanding purchase rights under the [removed: ESPP] [added: 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. |

| (3) | In January 2015, [removed: the Company's] [added: our] class A stockholders approved the ESPP which permits eligible employees to purchase shares of Class A common stock at a 15% discount to the stock price on the purchase date, subject to certain restrictions. See Note [removed: 16—Share-based] [added: 15—Share-based] Compensation to our consolidated financial statements included in Item 8—Financial Statements and Supplementary Data of this report. As of September 30, [removed: 2016, 152] [added: 2017, 149] million shares and [removed: 19] [added: 18] million shares [removed: were] [added: remain] available for issuance under the EIP and the ESPP, respectively. |

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

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

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

| July 1-31, 2017 | 2,311,218 | | | $ | 95.02 | | | 2,294,983 | | | $ | 5,310,521,927 | |

| August 1-31, 2017 | 5,594,044 | | | $ | 102.11 | | | 5,594,044 | | | $ | 4,739,175,366 | |

| September 1-30, 2017 | 9,019,355 | | | $ | 104.72 | | | 9,019,355 | | | $ | 3,794,467,851 | |

| Total | 16,924,617 | | | $ | 102.54 | | | 16,908,382 | | | | | |

| Equity compensation plans approved by stockholders | 13,081,232 | | (1) | $ | 50.17 | | (2) | 166,492,598 | | (3) |

All per share amounts and number of shares presented below reflect the four-for-one stock split that was effected in the second quarter of fiscal 2015.

See Note 14—Stockholders' Equity in Item 8—Financial Statements and Supplementary Data of this report.

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) |

The following [removed: table presents] [added: tables present] selected Visa Inc. financial data for the past five fiscal years.

| | [removed: |] Fiscal Year Ended September 30, | | | | | | | | | | | | | | | | | | | [added: |]

| Statement of Operations Data: | [added: 2017(1)] | [removed: 2016 (1),(2)] | | | [added: 2016(1)] | [removed: 2015 (2),(3)] | | | [added: 2015] | [removed: 2014 (2),(4)] | | | [added: 2014] | [removed: 2013 (2)] | | | [added: 2013] | [removed: 2012 (5)] | | |

| | [removed: |] (in millions, except per share data) | | | | | | | | | | | | | | | | | | | [added: |]

| Operating revenues | [added: $] | [added: 18,358 | | |] $ | 15,082 | | | $ | 13,880 | | | $ | 12,702 | | | $ | 11,778 | | | [removed: $ | 10,421 | |]

| Operating expenses | [added: $] | [added: 6,214 | | |] $ | 7,199 | | [added: (3)] | $ | 4,816 | | | $ | 5,005 | | | $ | 4,539 | | | [removed: $ | 8,282 | |]

| Operating income | [added: $] | [added: 12,144 | | |] $ | 7,883 | | | $ | 9,064 | | | $ | 7,697 | | | $ | 7,239 | | | [removed: $ | 2,139 | |]

| Net income | [added: $] | [added: 6,699 | | (2) |] $ | 5,991 | | | $ | 6,328 | | | $ | 5,438 | | | $ | 4,980 | | | [removed: $ | 2,144 | |]

| Basic earnings per share—class A common [removed: stock(6)] [added: stock(4)] | [added: $] | [added: 2.80 | | |] $ | 2.49 | | | $ | 2.58 | | | $ | 2.16 | | | $ | 1.90 | | | [removed: $ | 0.79 | |]

| Diluted earnings per share—class A common [removed: stock(6)] [added: stock(4)] | [added: $] | [added: 2.80 | | |] $ | 2.48 | | | $ | 2.58 | | | $ | 2.16 | | | $ | 1.90 | | | [removed: $ | 0.79 | |]

| | [removed: |] At September 30, | | | | | | | | | | | | | | | | | | | [added: |]

| Balance Sheet Data: | [added: 2017(1)] | [removed: 2016 (2)] | | | [added: 2016(1)] | [removed: 2015 (2),(3)] | | | [added: 2015] | [removed: 2014 (2),(4)] | | | [added: 2014] | [removed: 2013 (2)] | | | [added: 2013] | [removed: 2012 (5)] | | |

| Total assets | [added: $] | [added: 67,977 | | |] $ | 64,035 | | | $ | 39,367 | | | $ | 37,543 | | | $ | 35,495 | | | [removed: $ | 38,002 | |]

| Accrued litigation | [added: $] | [added: 982 | | |] $ | 981 | | | $ | 1,024 | | | $ | 1,456 | | [added: (5)] | $ | 5 | | [removed: | $ | 4,386 |] [added: (5)] |

| Total equity | [added: $] | [added: 32,760 | | |] $ | 32,912 | | | $ | 29,842 | | | $ | 27,413 | | | $ | 26,870 | | | [removed: $ | 27,630 | |]

| Dividend declared and paid per common [removed: share(6)] [added: share(4)] | [added: $] | [added: 0.66 | | |] $ | 0.56 | | | $ | 0.48 | | | $ | 0.40 | | | $ | 0.33 | | | [removed: $ | 0.22 | |]

| [removed: (2)] [added: (5)] | During fiscal 2013, we made payments from the U.S. litigation escrow account totaling $4.4 billion in connection with the U.S. covered litigation. During fiscal 2014, the court entered the final judgment order approving the settlement with the class plaintiffs in the interchange multidistrict litigation proceedings. Certain merchants in the settlement classes objected to the settlement and filed opt-out claims. Takedown payments of approximately $1.1 billion related to the opt-out merchants were received and deposited into the U.S. litigation escrow account, and a related increase in accrued litigation to address the opt-out claims were recorded in the second quarter of fiscal 2014. [removed: An additional accrual of $450 million associated with these opt-out claims was recorded in the fourth quarter of fiscal 2014. Payments totaling $528 million were made from fiscal 2014 through 2016 from the U.S. litigation escrow account reflecting settlements with a number of individual opt-out merchants, resulting in an accrued balance of $978 million related to U.S. covered litigation as of September 30, 2016.] See Note 3—U.S. and Europe Retrospective Responsibility Plans and Note [removed: 20—Legal] [added: 19—Legal] Matters to our consolidated financial statements included in Item 8—Financial Statements and Supplementary Data of this report. |

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

| | (in millions, except per share data) | | | | | | | | | | | | | | | | | | | |

| Long-term debt | $ | 16,618 | | (6) | $ | 15,882 | | (6) | $ | — | | | $ | — | | | $ | — | | |

| (1) | Our results of operations for fiscal 2017 and the last quarter of fiscal 2016, and the financial position as of September 30, 2017 and 2016, include Visa Europe's financial results. |

| (2) | During fiscal 2017, in connection with our legal entity reorganization, we eliminated deferred tax balances originally recognized upon the acquisition of Visa Europe, resulting in the recognition of a non-recurring, non-cash income tax provision of $1.5 billion. |

| (3) | During 2016, upon consummation of the Visa Europe acquisition, we recorded a non-recurring loss of $1.9 billion, before tax, in operating expense resulting from the effective settlement of the Framework Agreement between us and Visa Europe. Net of related tax benefit of $693 million, determined by applying applicable federal and state tax rates, the adjustment to net income was an increase of $1.2 billion. |

| (6) | During fiscal 2017 and fiscal 2016, we issued fixed-rate senior notes in an aggregate principal amount of $2.5 billion and $16.0 billion, respectively. See Note 8—Debt to our consolidated financial statements included in Item 8—Financial Statements and Supplementary Data of this report. |

| (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. |

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

| (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. |

| (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. |

| As of September 30, [removed: 2016] [added: 2017] and [removed: 2015] [added: 2016] and for the years ended September 30, [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014] [added: 2015] | |

| [Report of Independent Registered Public Accounting [removed: Firm](#sF88031272CFA5F83B8F79C7A1771943F)] [added: Firm](#s7934BAB348E15124A05F83607DB4758E)] | [removed: [51](#sF88031272CFA5F83B8F79C7A1771943F)] [added: [53](#s7934BAB348E15124A05F83607DB4758E)] |

| [Consolidated Balance [removed: Sheets](#s2530685B56355F5F8B46A4E7DEDA35FD)] [added: Sheets](#s737A439606945733B08E6248CDC4A3A5)] | [removed: [52](#s2530685B56355F5F8B46A4E7DEDA35FD)] [added: [54](#s737A439606945733B08E6248CDC4A3A5)] |

| [Consolidated Statements of [removed: Operations](#s701008CD8B3B5C0EB894330418136BE9)] [added: Operations](#s3BAD584958A559C785B28BA5495E915A)] | [removed: [54](#s701008CD8B3B5C0EB894330418136BE9)] [added: [55](#s3BAD584958A559C785B28BA5495E915A)] |

| [Consolidated Statements of Comprehensive [removed: Income](#sFD610D49F642523E866E3515965842AC)] [added: Income](#sB5E8DBCB06C751CBB77EFB9FDDBE7607)] | [removed: [56](#sFD610D49F642523E866E3515965842AC)] [added: [56](#sB5E8DBCB06C751CBB77EFB9FDDBE7607)] |

| [Consolidated Statements of Changes in [removed: Equity](#s4B08FE6C24AF5FB8A22D557F6B3E1586)] [added: Equity](#sA32FDA63CC125A13B4092A0269DC8531)] | [removed: [57](#s4B08FE6C24AF5FB8A22D557F6B3E1586)] [added: [57](#sA32FDA63CC125A13B4092A0269DC8531)] |

| [Consolidated Statements of Cash [removed: Flows](#sB5C987FBECF358C3842FA480D80DF2DA)] [added: Flows](#sD418CF9D4BFF5B39BC005D81B5427D92)] | [removed: [60](#sB5C987FBECF358C3842FA480D80DF2DA)] [added: [60](#sD418CF9D4BFF5B39BC005D81B5427D92)] |

| [Notes to the Consolidated Financial [removed: Statements](#s6291DD9DFAA6583D87FB82DD260EA16E)] [added: Statements](#s7963BEA06D395A338CBFD212AAE629D3)] | [removed: [62](#s6291DD9DFAA6583D87FB82DD260EA16E)] [added: [61](#s7963BEA06D395A338CBFD212AAE629D3)] |

We have audited the accompanying consolidated balance sheets of Visa Inc. and subsidiaries as of September 30, [removed: 2016] [added: 2017] and [removed: 2015,] [added: 2016,] 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: 2016.][added: 2017.]

We also have audited Visa Inc.’s internal control over financial reporting as of September 30, [removed: 2016,] [added: 2017,] based on [removed: 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: 2016] [added: 2017] and [removed: 2015,] [added: 2016,] and the results of their operations and their cash flows for each of the years in the three-year period ended September 30, [removed: 2016,] [added: 2017,] 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: 2016,] [added: 2017,] based on [removed: criteria established in] Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway [removed: Commission.][added: Commission (COSO).]

| | September 30, [removed: 2016] [added: 2017] | | | | September 30, [removed: 2015] [added: 2016] | | |

| | (in millions, except [removed: par value] [added: per share] data) | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Cash and cash equivalents | $ | [removed: 5,619] [added: 9,874] | | | $ | [removed: 3,518] [added: 5,619] | |

| Restricted cash—U.S. litigation escrow (Note 3) | [removed: 1,027] [added: 1,031] | | | | [removed: 1,072] [added: 1,027] | | |

| Trading | [removed: 71] [added: 82] | | | | [removed: 66] [added: 71] | | |

| Available-for-sale | [removed: 3,248] [added: 3,482] | | | | [removed: 2,431] [added: 3,248] | | |

| Settlement receivable | [removed: 1,467] [added: 1,422] | | | | [removed: 408] [added: 1,467] | | |

| Accounts receivable | [removed: 1,041] [added: 1,132] | | | | [removed: 847] [added: 1,041] | | |

| Customer collateral (Note [removed: 11)] [added: 10)] | [removed: 1,001] [added: 1,106] | | | | [removed: 1,023] [added: 1,001] | | |

| Current portion of client incentives | [removed: 284] [added: 344] | | | | [removed: 303] [added: 284] | | |

| Prepaid expenses and other current assets [removed: (Note 5)] | [removed: 555] [added: 550] | | | | [removed: 353] [added: 555] | | |

| Total current assets | [removed: 14,313] [added: 19,023] | | | | [removed: 10,021] [added: 14,313] | | |

| Investment securities, available-for-sale (Note 4) | [removed: 3,931] [added: 1,926] | | | | [removed: 3,384] [added: 3,931] | | |

| Client incentives | [removed: 448] [added: 591] | | | | [removed: 110] [added: 448] | | |

| Property, equipment and technology, net (Note [removed: 6)] [added: 5)] | [removed: 2,150] [added: 2,253] | | | | [removed: 1,888] [added: 2,150] | | |

| Other assets [removed: (Note 5)] | [removed: 893] [added: 1,226] | | | | [removed: 778] [added: 893] | | |

| Intangible assets, net (Note [removed: 7)] [added: 2 and Note 6)] | [removed: 27,234] [added: 27,848] | | | | [removed: 11,361] [added: 27,234] | | |

| Total assets | $ | [removed: 64,035] [added: 67,977] | | | $ | [removed: 39,367] [added: 64,035] | |

| Accounts payable | $ | [removed: 203] [added: 179] | | | $ | [removed: 127] [added: 203] | |

| Settlement payable | [removed: 2,084] [added: 2,003] | | | | [removed: 780] [added: 2,084] | | |

| Accrued compensation and benefits | [removed: 673] [added: 757] | | | | [removed: 503] [added: 673] | | |

| Client incentives | [removed: 1,976] [added: 2,089] | | | | [removed: 1,049] [added: 1,976] | | |

| Accrued liabilities (Note [removed: 8)] [added: 7)] | [removed: 1,128] [added: 1,129] | | | | [removed: 849] [added: 1,128] | | |

| Accrued litigation (Note [removed: 20)] [added: 19)] | [removed: 981] [added: 982] | | | | [removed: 1,024] [added: 981] | | |

| Total current liabilities | [removed: 8,046] [added: 9,994] | | | | [removed: 5,355] [added: 8,046] | | |

| Long-term debt (Note [removed: 9)] [added: 8)] | [removed: 15,882] [added: 16,618] | | | | [removed: —] [added: 15,882] | | |

| Deferred tax liabilities (Note [removed: 19)] [added: 18)] | [removed: 4,808] [added: 5,980] | | | | [removed: 3,273] [added: 4,808] | | |

| Deferred purchase consideration [removed: (Note 2)] | [removed: 1,225] [added: 1,304] | | | | [removed: —] [added: 1,225] | | |

| Goodwill (Note 2 and Note 6) | 15,110 | | | | 15,066 | | |

| Customer collateral (Note 10) | 1,106 | | | | 1,001 | | |

| Current maturities of long-term debt (Note 8) | 1,749 | | | | — | | |

| Net income | $ | 6,699 | | | $ | 5,991 | | | $ | 6,328 | |

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

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

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

| Balance as of September 30, 2016 | 2 | | | 3 | | | 1,871 | | | 245 | | | 17 | | | $ | 5,717 | | | $ | (170 | ) | | $ | (34 | ) | | $ | 17,395 | | | $ | 10,462 | | | $ | (458 | ) | | $ | 32,912 | |

| VE territory covered losses incurred (Note 3) | | | | | | | | | | | | | | | | | | | | | | | | (209 | | ) | | | | | | | | | | | | | | (209 | | ) |

| Recovery through conversion rate adjustment (Note 3 and Note 13) | | | | | | | | | | | | | | | | (191 | | ) | | | | | | 191 | | | | | | | | | | | | | | | | — | | |

| Charitable contribution of Visa Inc. shares (Note 13 and Note 18) | | | | | | | 2 | | | | | | | | | | | | | 170 | | | | | | | | | | | | | | | | | | | | 170 | | |

| Treasury stock appreciation, net of tax | | | | | | | | | | | | | | | | | | | | | | | | | | | | 14 | | | | | | | | | | | | 14 | | |

| Repurchase of class A common stock (Note 13) | | | | | | | (77 | ) | | | | | | | | | | | | | | | | | | | | (817 | | ) | | (6,074 | | ) | | | | | | (6,891 | | ) |

| Balance as of September 30, 2017 | 2 | | | 3 | | | 1,818 | | | 245 | | | 13 | | | $ | 5,526 | | | $ | — | | | $ | (52 | ) | | $ | 16,900 | | | $ | 9,508 | | | $ | 878 | | | $ | 32,760 | |

| (1) | Series B and C preferred stock are alternatively referred to as UK&I and Europe preferred stock, respectively. |

| | (in millions, except noted otherwise) | | | | | | | | | | |

| Net income | $ | 6,699 | | | $ | 5,991 | | | $ | 6,328 | |

| Charitable contribution of Visa Inc. shares (Note 13 and Note 18) | 192 | | | | — | | | | — | | |

| Purchases | (3,238 | | ) | | (10,426 | | ) | | (2,850 | | ) |

In February 2017, the Company completed a reorganization of Visa Europe and certain other legal entities to align the Company's corporate structure to the geographic jurisdictions in which it conducts business operations.

Associated with this reorganization, the newly-formed Visa Foundation received all Visa Inc. shares held by Visa Europe that were previously recorded as treasury stock.

The Company revised certain fiscal 2016 amounts on the consolidated statements of cash flows to correct a presentation error in gross investing activity.

Purchases and proceeds from maturities and sales of investment securities were each reduced by $17.6 billion, from $28.0 billion and $26.7 billion, respectively, to $10.4 billion and $9.1 billion, respectively.

The previously reported amounts included purchases and sales of securities, using the proceeds of the Company's December 2015 debt offering, that had a maturity of 90 days or less.

These securities are therefore considered cash and cash equivalents for financial reporting purposes and should not have been included in the gross investing activity.

The Company did not have any Level 3 assets or liabilities at September 30, 2017 and 2016.

September 30, 2017

September 30, 2017

Prior to the acquisition of Visa Europe (see Note 2—Visa Europe), other revenues also included revenues earned from Visa Europe in connection with the Visa Europe Framework Agreement.

Other assumptions involve demographic factors such as

September 30, 2017

September 30, 2017

Subsequently, the FASB also issued a series of amendments to the new revenue standard.

The Company will adopt the standard effective October 1, 2018, and expects to adopt the standard using the modified retrospective transition method.

The Company expects that the new standard will primarily impact recognition timing for certain fixed incentives and price discounts provided to clients, and the classification of certain client incentives between contra revenues and operating expenses.

The Company adopted the standard effective October 1, 2016.

The Company adopted the standard effective October 1, 2016.

September 30, 2017

The adoption had the following impact on the consolidated financial statements:

| • | The Company recorded excess tax benefits of $70 million in its provision for income taxes rather than as an increase to additional paid-in capital for the year ended September 30, 2017 on a prospective basis. Therefore, the prior period presented has not been adjusted. |

VISA INC.

| | |

| --- | --- |

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.

November 15, 2016

| | | | | | | | |

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

| Goodwill | 15,066 | | | | 11,825 | | |

See accompanying notes, which are an integral part of these consolidated financial statements.

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

| | For the Years Ended September 30, | | | | | | | | | | |

CONSOLIDATED STATEMENTS OF OPERATIONS—(Continued)

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

| Balance as of September 30, 2014 | 1,978 | | | 245 | | | 22 | | | $ | 18,299 | | | $ | 9,131 | | | $ | (17 | ) | | $ | 27,413 | |

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

| Purchases | (28,004 | | ) | | (2,850 | | ) | | (2,572 | | ) |

CONSOLIDATED STATEMENTS OF CASH FLOWS—(Continued)

| Payments from (return to) U.S. litigation escrow account—U.S. retrospective responsibility plan (Note 3 and Note 20) | 45 | | | | 426 | | | | (999 | | ) |

| Excess tax benefit for share-based compensation | 63 | | | | 84 | | | | 90 | | |

In a series of transactions from October 1 to October 3, 2007, Visa Inc. (Visa or the Company) undertook a reorganization in which Visa U.S.A. Inc. (Visa U.S.A.), Visa International Service Association (Visa International), Visa Canada Corporation (Visa Canada) and Inovant LLC (Inovant) became direct or indirect subsidiaries of Visa and established the U.S. retrospective responsibility plan (the October 2007 reorganization or reorganization).

The reorganization was reflected as a single transaction on October 1, 2007 using the purchase method of accounting with Visa U.S.A. as the accounting acquirer.

Visa Europe Limited (Visa Europe) did not become a subsidiary of Visa Inc., but rather remained owned and governed by its European member financial institutions.

The Company's consolidated statements of operations do not reflect the financial results of Visa Europe for the 10 days from the acquisition date through June 30, 2016 as the impact was immaterial.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The Company's Level 3 assets and liabilities included auction rate securities and the Visa Europe put option at September 30, 2015.

These investments

Any

straight-line basis over the requisite service period, which is generally the vesting period.

In August 2015, the FASB issued ASU No. 2015-14, which defers the effective date of ASU No. 2014-09 by one year.

In March 2016, the FASB issued ASU 2016-08, which clarifies the implementation guidance on principal versus agent considerations under the new revenue recognition standard.

In April 2016, the FASB issued ASU 2016-10, which clarifies the implementation guidance on identifying promised goods or services and on determining whether an entity's promise to grant a license with either a right to use the entity's intellectual property (which is satisfied at a point in time) or a right to access the entity's intellectual property (which is satisfied over time).

In May 2016, the FASB issued ASU 2016-11, which rescinds certain SEC staff observer comments upon adoption of ASU 2014-09, including the SEC comments related to consideration given by a vendor to a customer.

In May 2016, the FASB also issued ASU 2016-12, which provides narrow scope improvements and technical expedients on assessing collectibility, presentation of sales taxes, evaluating contract modifications and completed contracts at the time of transition and the disclosure requirement for the effect of the accounting change for the period of adoption.The Company will adopt the standard effective October 1, 2018.

The standard permits the use of either the retrospective or cumulative effect transition method.

In April 2015, the FASB issued ASU No. 2015-03, which simplifies the presentation of debt issuance costs by requiring that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of debt liability, consistent with debt discounts and premiums.

Subsequently, in August 2015, the FASB issued ASU No. 2015-15, which adds SEC staff guidance on the presentation of debt issuance costs related to line-of-credit arrangements, allowing for the deferral and presentation of debt issuance costs as an asset and subsequent amortization of the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement.

The Company elected to early adopt the standards effective October 1, 2015 and the carrying amount of the Company's debt liability is presented net of issuance costs on the consolidated financial statements.

In September 2015, the FASB issued ASU No. 2015-16, which simplifies the accounting for post-acquisition adjustments by eliminating the requirement to retrospectively account for the adjustments made to provisional amounts recognized in a business combination.

prospective basis effective October 1, 2015.

We maintain a system of disclosure controls and procedures (as defined in the Rules 13a-15(e) and [removed: 15(d)-15(e)] [added: 15d-15(e)] under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that is designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of September 30, [removed: 2016,] [added: 2017,] our disclosure controls and procedures were [removed: effective,] [added: effective] at the reasonable assurance level.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of September 30, [removed: 2016.][added: 2017.]

Based on management’s assessment, management has concluded that the Company’s internal control over financial reporting was effective as of September 30, [removed: 2016] [added: 2017] 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: 2016,] [added: 2017,] has been audited by KPMG LLP, an independent registered public accounting firm and is included in Item 8 of this report.

During fiscal [removed: 2016,] [added: 2017,] there were no significant changes in our internal controls over financial reporting that occurred during the year ended September 30, [removed: 2016,] [added: 2017,] 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: 2016,] [added: 2017,] and certain information included therein is incorporated herein by reference.

[removed: | (a) |] The following documents are filed as part of this report: [removed: |]

| Date: | | November [removed: 15, 2016] [added: 16, 2017] |

| /s/ [removed: Charles W. Scharf] [added: Alfred F. Kelly, Jr.] | | Chief Executive Officer and Director | | November [removed: 15, 2016] [added: 16, 2017] |

| /s/ Vasant M. Prabhu | | Chief Financial Officer | | November [removed: 15, 2016] [added: 16, 2017] |

| /s/ James H. Hoffmeister | | Global Corporate Controller and | | November [removed: 15, 2016] [added: 16, 2017] |

| /s/ Robert W. Matschullat | | Independent Chair | | November [removed: 15, 2016] [added: 16, 2017] |

| /s/ Lloyd A. Carney | | Director | | November [removed: 15, 2016] [added: 16, 2017] |

| /s/ Mary B. Cranston | | Director | | November [removed: 15, 2016] [added: 16, 2017] |

| /s/ Francisco Javier Fernández-Carbajal | | Director | | November [removed: 15, 2016] [added: 16, 2017] |

| /s/ Gary A. Hoffman | | Director | | November [removed: 15, 2016] [added: 16, 2017] |

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

| [removed: Alfred F. Kelly, Jr. | | Designate] [added: By:] | | [added: /s/ Alfred F. Kelly,Jr.] |

| /s/ Suzanne Nora Johnson | | Director | | November [removed: 15, 2016] [added: 16, 2017] |

| /s/ John A. C. Swainson | | Director | | November [removed: 15, 2016] [added: 16, 2017] |

| /s/ Maynard G. Webb, Jr. | | Director | | November [removed: 15, 2016] [added: 16, 2017] |

| 2.1 | | Amended and Restated Transaction Agreement, dated as of May 10, 2016, between Visa Inc. and Visa Europe Limited # | | 8-K | | 001-33977 | | [removed: 2.1] [added: [2.1](http://www.sec.gov/Archives/edgar/data/1403161/000140316116000027/exh21artransagmt.htm)] | | 5/10/2016 |

| 3.1 | | Sixth Amended and Restated Certificate of Incorporation of Visa Inc. | | 8-K | | 001-33977 | | [removed: 3.2] [added: [3.2](http://www.sec.gov/Archives/edgar/data/1403161/000119312515024600/d859996dex32.htm)] | | 1/29/2015 |

| 3.2 | | Certificate of Correction of the Certificate of Incorporation of Visa Inc. | | 8-K | | 001-33977 | | [removed: 3.1] [added: [3.1](http://www.sec.gov/Archives/edgar/data/1403161/000119312515070363/d880154dex31.htm)] | | 2/27/2015 |

| 3.3 | | Amended and Restated Bylaws of Visa Inc. | | 10-K | | 001-33977 | | [removed: 3.3] [added: [3.3](http://www.sec.gov/Archives/edgar/data/1403161/000140316115000013/vex33093015.htm)] | | 11/20/2015 |

| 4.1 | | Form of stock certificate of Visa Inc. | | S-4/A | | 333-143966 | | [removed: 4.1] [added: [4.1](http://www.sec.gov/Archives/edgar/data/1403161/000119312507200042/dex41.htm)] | | 9/13/2007 |

| 4.2 | | Form of specimen certificate for class B common stock of Visa Inc. | | 8-A | | 000-53572 | | [removed: 4.1] [added: [4.1](http://www.sec.gov/Archives/edgar/data/1403161/000119312509012478/dex41.htm)] | | 1/28/2009 |